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Bank of Montreal: Raises its price target for Eli Lilly (LLY.N) from $930 to $1,100.November 6th - The Bank of England voted to keep interest rates unchanged at 4%, but sharp divisions within its Monetary Policy Committee (MPC) suggest a rate cut may be imminent. Faced with inflation exceeding normal levels in recent months, the nine members of the MPC voted 5-4 to maintain borrowing costs. However, in a new set of economic forecasts released today, the Bank of England stated that it expects inflation to have now peaked and will decline in the coming months, stabilizing at slightly above 2% within two years. Bank of England Governor Bailey said, "We are keeping interest rates at 4% today. We still believe that rates will gradually decline, but we need to ensure that inflation returns to our 2% target level before we cut rates again." The fact that four MPC members voted in favor of a rate cut, and the governors hints of further cuts, has fueled speculation that the Bank of England could cut rates as early as next month, shortly before Christmas.On November 6th, in its latest interest rate decision, five members of the Bank of England voted to keep interest rates unchanged, while four voted to cut rates. This was the first time committee members explained their rationale for their decisions in a public communication. Bailey stated that "upside risks to inflation have diminished" since August, choosing to hold rates steady and await further evidence. He added that his position was based on the interest rate path projected by the "forward-looking Taylor rule," which suggests three more rate cuts over the next year. Joining Bailey in voting to keep rates unchanged were Deputy Governor Lombardelli, Chief Economist Peale, and external members Mann and Green. For the first time since joining the committee in 2023, Deputy Governor for Financial Stability Bridenstine disagreed with Bailey, favoring a rate cut. She stated that "upside risks to inflation have diminished," while downside risks to demand were "more apparent." Deputy Governor for Markets Ramsden, along with external members Taylor and Dingela, were other members leaning towards a dovish stance.On November 6th, the Bank of England adjusted its key message regarding the interest rate outlook. In its previous statement, the Bank of England considered a "gradual and cautious approach" to interest rate cuts appropriate, but now it states: "Interest rates are likely to continue to decline gradually if the decline in inflation continues." The Bank of Englands decision to keep interest rates unchanged was not unexpected for investors. Wednesdays interest rate futures pricing suggested only a one-in-three chance of a 25 basis point cut. However, the 5-4 vote, and signs that Bailey might soon change his stance, could boost bets on a rate cut at the Bank of Englands next meeting in mid-December. Investors on Wednesday estimated a roughly 60% chance of a rate cut next month. The Bank of England also released, for the first time, summaries of the views of individual members of the Monetary Policy Committee, as part of its forecasting process reform. The bank expects economic growth of 1.5% this year, up from its previous forecast of 1.25%, and 1.2% in 2026, roughly unchanged from its August forecast.According to institutional data and Reuters calculations, Russias marine diesel exports fell 4% month-on-month in October.

Oil Prices Settle Mixed Due to Supply And Demand Worries in Russia

Aria Thomas

Apr 21, 2022 09:23

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Oil prices have been boosted by a tightening supply picture after sanctions on Russia – the world's second biggest oil exporter and a critical European supplier – for its invasion of Ukraine, which Moscow refers to as a "special operation."


"As the Ukraine war escalates, the chance of the conflict lasting longer grows, as does the possibility of Russian supplies being cut off from the market," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.


The market was further bolstered by a government report suggesting that US oil stocks declined by 8 million barrels last week, owing to a spike in exports to a more than two-year high. [EIA/S]


Both benchmarks, however, fell roughly 5% on Tuesday after the International Monetary Fund lowered its global growth forecast by nearly a full percentage point, citing the economic impact of Russia's war in Ukraine and warning that inflation had become a "clear and present danger" for many countries.


"Weakening growth and rising inflationary pressures can only imply one thing: the global economy is on the verge of stagflation," P.M. economist Stephen Greenock said.


Continuing coronavirus lockdowns in China have also weighed on demand and pricing in the world's largest petroleum importer.


The European Commission is attempting to accelerate the availability of alternative energy sources in order to reduce the cost of the Russian oil embargo and convince Germany and other hesitant EU states to approve the policy, an EU source told Reuters.


Meanwhile, a series of disruptions exacerbated supply issues. Libya, an OPEC member, has been forced to suspend production of 550,000 barrels per day due to a wave of blockades on key oilfields and export terminals, the country's National Oil Corporation (NOC) stated.


The Organization of the Petroleum Exporting Countries and its allies, collectively referred to as OPEC+, produced 1.45 million barrels per day less than its target in March, as Russian output began to decline following the imposition of Western sanctions, according to a report from the producer alliance.

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