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Livesquawk - Closing Wrap - Wednesday 22.09
Closing Wrap - Wednesday 22.09
Headlines
  • Fed Signals Bond-Buying Taper May Start Soon, Split On 2022 Hike
  • US Senate Showdown Vote On Debt Limit Could Come Next Week
  • Payments Giant Nexi Says It Is Working On Digital Euro With The ECB
  • ECB's Muller Plays Down Prospect Of Increased Bond Buys
  • EU Devising 'Toolbox' For Member Countries To Respond To Energy Price Surge
  • Italy To Skip Conventional Debt Sales Via Banks In Early Autumn
  • Iraq OilMIn Says OPEC And Allies Working To Keep Crude Price Near $70
  • Activist Bluebell Takes Stake In GlaxoSmithKline To Push For Change At Top
  • Imminent China Evergrande Deal Will See CCP Take Control
Commentary
Fed Signals Bond-Buying Taper May Start Soon, Split On 2022 Hike

Federal Reserve officials signaled they would probably begin tapering their bond-buying program soon and revealed a growing inclination to start raising interest rates in 2022. 

 

If progress toward the Fed’s employment and inflation goals “continues broadly as expected, the committee judges that a moderation in the pace of asset purchases may soon be warranted,” the U.S. central bank’s policy-setting Federal Open Market Committee said Wednesday in a statement following a two-day meeting.   

 

The Fed also published updated quarterly projections which showed officials are now evenly split on whether or not it will be appropriate to begin raising the federal funds rate as soon as next year, according to the median estimate of FOMC participants. In June, the median projection indicated no rate increases until 2023. (Bloomberg – Continue Reading)

Image Source: Federal Reserve

SNB Expected To Stay The Course On Rates, Guidance

The Swiss National Bank is widely expected to hold interest rates at current levels as central bankers around the world consider their next steps now that Covid-19 cases seem to be under control in some countries and regions.

 

Economists say they expect both the main policy and sight deposit interest rates to remain at -0.75%, currently the lowest in the world. Few changes if any are anticipated for the SNB’s forward guidance, and Swiss central bankers are expected to repeat economic projections from the last rate decision in mid-June.

 

Something else that should be the same is SNB President Thomas Jordan’s participation in this week’s meeting. His attendance was in doubt after he reportedly underwent heart surgery last month following a routine check-up, but media reports say he will be on hand to talk monetary policy with the rest of the bank’s three-person governing board. And talking will likely be the only thing the trio does this time around for the trio. (LiveSquawk – Continue Reading)

BoE Preview: MPC Hawks Appear To Be Winning Inflation Argument

In a busy week of central bank announcements (19 in all), the Bank of England’s rate setting committee is expected to stay the course keep and its powder dry this month, despite growing signs of more hawkish assertions amongst several members.  

  

The BoE’s Monetary Policy Committee (MPC) is set to leave its headline interest rate at 0.1% and its asset purchase programme at GBP 895bln on Thursday. Analysts say they expect a unanimous vote to keep policy rate settings on hold, alongside a potential 8-1 vote split to leave the asset purchase targets unchanged, with dissention likely from either Michael Saunders or Dave Ramsden. Catherine Mann (external member) and Huw Pill (chief economist) will be attending their first meeting as members of the committee.  

 

The BoE’s decision announcement is set to come hot on the heels of the FOMC rate decision Wednesday evening, with both beset by similar economic concerns: slowing growth and accelerating inflation. The Covid-19 Delta variant has proved a headwind on the route to recovery, as has the expiration of a number of schemes employed to soften the economic blow from the global pandemic. (LiveSquawk – Continue Reading)

Goldman Sees $90 Oil If Coming Winter Is Colder Than Normal

Oil may surge to $90 a barrel if the approaching winter in the northern hemisphere proves colder than normal, said Jeff Currie, global head of commodities research at Goldman Sachs Group Inc.

 

Such a rise would be $10 higher than the bank’s current forecast and would be accompanied by a prolonged period of high natural gas prices that already have had disastrous consequences for U.K. power providers.

 

Tightening gas supplies in Europe will elevate demand for oil as an alternative at a time when global crude output is constrained, Currie said during a Bloomberg Television interview on Wednesday. Post-hurricane disruptions in the U.S. Gulf of Mexico were among the worldwide factors he cited. (Bloomberg – Continue Reading)

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