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Livesquawk - Closing Wrap - Thursday 16.12
Closing Wrap - Thursday 16.12
Headlines
  • BoE Shocks With First Rate Hike Since Crisis To Combat Inflation
  • President Biden Signs Debt Ceiling Increase, Preventing US Default
  • US Jobless Claims Rose Slightly Last Week From 52-Year Low
  • US Manufacturing Production Near Three-Year High In November
  • US Housing Starts; Building Permits Increase In November
  • ECB Leaves Rates On Hold; To Boost APP When PEPP Expires
  • ECB Hawks Unhappy About Extending PEPP, No End Date For APP
  • Euro Zone Business Growth Slipped In December As Omicron Rose
  • US Yield Curve Steepens, But Flattening Trend Remains Intact
  • BoE Stunner Sends Gilt Yields To Its Biggest Daily Rise In A Month
  • USD Holds As Traders Look Beyond Fed To Next Big Cent. Bank Meetings
  • Bitcoin Holds Steady As BoE Hikes Interest Rate, ECB To Reduce Stimulus
  • Oil Hits $75 As US Demand And Fed Outweighs Virus Concerns
  • US Big Tech Stocks Slide After Various Central Bank Policy Shifts
  • Global Stocks Rise As Central Banks Toughen Stance On Inflation
  • Apple Plans To Substitute Chips From Broadcom, Skyworks With Its Own
  • Creditors Sue China’s Evergrande For Claims Topping $13 Billion
  • Turkish Central Bank Finalises Its Easing Cycle With A 100Bp Cut
  • Mexico’s Central Bank Hikes Its Overnight Rate By 50Bps To 5.50%
Commentary
BoE Blinks First As Central Banks Start to Tighten Monetary Policy

In a move that surprised analysts and wrongfooted markets the Bank of England’s Monetary Policy Committee became the first major central bank to lift its bank rate and, in the process, took itself off the Christmas party invite list of many bankers. 

 

The committee voted by a majority of 8-1 to raise rates by 15bps to 0.25% and return the main rate back to the March 2020 level. It also voted unanimously to maintain its GBP 895bn quantitative easing programme (which expires at the end of this month). (Continue Reading – LiveSquawk)

ECB Holds On Rates, Lagarde Says 2022 Hike ‘Very Unlikely’, Bank Announces End of Pandemic-era Asset Buys

The European Central Bank shuffled in the direction of hawkish monetary policy Thursday by announcing plans for a first-quarter taper of its emergency pandemic asset purchase programme before it ends the scheme in March.

 

The bank failed to define how much it will ease the buys next quarter, but the taper is to be followed by an extra EUR20bn in monthly purchases staring in April via another scheme, the Asset Purchase Programme, or APP, which has been running for the majority of the past seven years.

 

“We did not want a transition that hurt,” ECB President Christine Lagarde said. (Continue Reading – LiveSquawk)

German Business Confidence Poised For Sixth Straight Decline Amidst Latest Corona Wave

A survey of German managers is expected to show less optimism about Europe’s largest economy as the fourth wave of the coronavirus stokes concerns.

 

An economists’ poll predicted a sixth consecutive decline in the Ifo Institute’s headline business climate index this month with a drop to 95.3 from the November reading of 96.5.

 

The expectations component for the next six months is forecast to fall to 93.5 from November’s mark of 94.2, and the current assessment reading from Ifo’s monthly survey of is set to decline to 97.5 from 99.0. (Continue Reading – LiveSquawk)

SNB Holds Interest Rates Steady, President Says Inflation Not Enough For Monpol Shift

As expected, the Swiss National Bank left its main interest rates unchanged at a global low -0.75% Thursday, and bank president Thomas Jordan said they will remain where they are despite rising inflation.

 

Jordan said that even though other central banks such as the US Federal Reserve are signalling rate hikes due to unprecedented consumer price growth, inflation in Switzerland is expected to remain relatively low and under what the SNB considers levels of price stability. “There is no need to change interest rates,” he said and reiterated the bank’s commitment to expansionary monetary policy. (Continue Reading – LiveSquawk)

Turkish Central Bank Finalises Its Easing Cycle With A 100Bp Cut

In the last rate setting meeting of this year, the CBT cut the policy rate by a final 100bp to 14%, as envisaged by the market consensus, though we were expecting that the bank would remain mute as Governor Kavcioglu did not rule out the possibility of a 'no cut' in the latest investor meeting held early December given sharp exchange volatility in recent weeks. So, despite shifts in global central bank policies with either outright rate hikes or preparations to deliver tighter policies along with increasing challenges on the domestic side with higher pricing pressures weighing on the inflation outlook, the CBT maintained monetary easing. (Continue Reading – ING)

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