Federal Reserve.

Last week saw the critical release of Australia’s inflation figures for the second quarter of 2016. The Consumer Price Index (the primary inflation measure) rose by 0.4% quarter-on-quarter which resulted in an annual inflation rate being 1.0% (a 17-year low). Average underlying inflation was down to 1.5% the lowest in the entire 20-year series. The lower import and producer prices [...]

While monetary policy divergence between the RBA and the Fed has been the general expectation for most of 2016, global economic conditions are likely to force the Fed to postpone any potential rate hike until next year while many market commentators are forecasting two cuts to the RBA cash rate by year end.   However, as the RBA has reiterated [...]

Following Britain's recent decision to leave the European Union, we expect monetary easing to be on the agenda for most central banks. While countries such as the UK and Japan have already used most of there firepower, Australia still has room to move at the current cash rate of 1.75%. With the possibility of deflation already pressuring the RBA into [...]

Last week all eyes were focused on US non-farm payrolls (employment data) which delivered an increase of 38,000 jobs (significantly below already low expectations of 160,000 new jobs) while at the same time figures from the last two months were revised down by ~59,000. As a result a rate hike by the Federal Reserve is arguably now off the agenda [...]

While The Federal Reserve Chair, Janet Yellen, has not detailed the exact timing, there is growing consensus that the second rate hike of the current cycle could happen as soon as mid-June off the back of an improved labour market. As a result, employment data to be released this Friday will be a key factor in determining how soon the [...]

The minutes from the Reserve Bank meeting released last week showed that the rate cut was line ball while minutes from the Federal Reserve meeting confirmed that June is “live” for the next rate hike.   The key message from the RBA was that they are concerned by the sudden disinflation and worried that it could become entrenched. This is [...]

Wire: Bloomberg News (BN) Date: Nov 11 2015 8:35:30 Goldman Contrarian Joins Chorus Warning on Bond-Market Liquidity By Cordell Eddings (Bloomberg) -- Add Goldman Sachs Group Inc.’s chief credit strategist to the list of market participants concerned about bond-market liquidity. Charles Himmelberg joined the chorus as the inventory of corporate bonds held by the Federal Reserve’s 22 primary dealers fell below zero last week for the [...]