Friday, May 29, 2015
Thursday, May 28, 2015
Wednesday, May 27, 2015
Tuesday, May 26, 2015
U.S. Federal Reserve Vice Chairman Stanley Fischer said it was "misleading" to give so much importance to the Fed's first interest rate hike since the process of returning to a more normal level will take a few years.
Fischer, speaking in Israel, said that while markets largely expect the first rate hike in September, it will be determined by data and not by date.
"If the (U.S.) economy is growing very, very slowly we will wait. If the economy is growing faster we will do it quicker," he said in a speech.
"What we are thinking about is raising the interest rate from zero, which is an ultra expansionary monetary policy to a quarter percent, which is an extremely expansionary monetary policy. This will be a gradual process," he said.
Fischer noted that the Federal Reserve board expects the interest rate will reach 3.25 to 4 percent by 2017-2018.
(Reporting by Steven Scheer and Tova Cohen)
Monday, May 25, 2015
Friday, May 22, 2015
Thursday, May 21, 2015
Manufacturing activity in Asia's top two economic powerhouses remained stuck in low gear in May, but an absence of inflation pressures suggested that authorities could inject yet more stimulus if needed.
The lackluster performance in China and Japan, along with alarmingly weak export data from South Korea and Taiwan, put the burden of supporting global growth squarely on Europe and particularly the United States, which is struggling to get back on track after a fierce winter.
China's factory activity contracted for the third straight month in May as domestic and export orders shrank, a private survey showed, adding to views that Beijing will have to roll out its most aggressive stimulus measures since the global financial crisis to avert a sharper slowdown.
"The subdued flash PMI print suggests there is no clear sign of near-term stabilization in (China's) economy. Risks to the outlook remain to the downside," Barclays economist Shengzu Wang said in a research note.
The flash or preliminary HSBC/Markit Purchasing Managers' Index (PMI) fell to 49.1 in May, weaker than an expected 49.3 and marking the fifth contraction in activity in six months.
China has already cut interest rates three times in six months and economists believe it will have to ease further as economic growth threatens to slow below the 7-percent pace seen in the first quarter.
Annabel Fiddes, an economist at Markit, said relatively strong deflationary pressures should leave plenty of scope for the authorities to implement further stimulus measures.
Analysts at Nomura saw China's growth slowing to 6.6 percent year-on-year in the second quarter, before edging up to 6.8 percent in the second half of the year.
"To offset the headwinds from deep-seated structural challenges, we maintain our call of further monetary easing with two more 50-basis-point (bps) cuts to banks' reserve requirement ratio and two more 25 bp policy interest rates cuts over the rest of this year," they said.
"The most likely timing for the next easing could be July, in our opinion, as it will take time for policymakers to assess the impact of policy easing taken so far."
In Japan, factory activity returned to growth as production and new orders picked up, but the improvement was tepid. The PMI edged up to 50.9, from 49.9 in April.
The report came on the back of official data this week that showed Japan's economy expanded in January-March at the fastest pace in a year.
However, much of that growth came from inventories as goods piled up on factory floors, and private consumption, housing investment and exports all rose but at a feeble pace.
Still, subdued input and output prices suggested inflation remained stubbornly low, adding to expectations the Bank of Japan will expand its already massive monetary stimulus program later this year.
Flash PMI readings for the euro zone are due at 0800 GMT, followed by the U.S. report at 1345 GMT.
Minutes of the U.S. central bank's April policy meeting released on Wednesday showed officials debated whether a slew of disappointing data, including weak consumer spending, signaled a temporary slump or evidence of a longer-lasting slowdown.
Most participants agreed economic growth would climb to a healthier pace and the labor market would strengthen.
(Additional reporting by Kevin Yao in BEIJING and Stanley White in TOKYO; Editing by Kim Coghill)
Wednesday, May 20, 2015
Tuesday, May 19, 2015
The European Central Bank intends to increase its purchases of euro-area assets in May and June ahead of an expected low-liquidity period in the summer, Executive Board member Benoit Coeure said.
“We are also aware of seasonal patterns in fixed-income market activity with the traditional holiday period from mid-July to August characterized by notably lower market liquidity,” Coeure said, according to the text of a speech delivered in London on Monday. “If need be, the frontloading may be complemented by some backloading in September when market liquidity is expected to improve again. The slightly higher purchase volume that market analysts may observe in the coming weeks is therefore unrelated to the recent episode of market volatility.”
Monday, May 18, 2015
Friday, May 15, 2015
Thursday, May 14, 2015
Wednesday, May 13, 2015
U.S. President Barack Obama's push for a pan-Pacific trade pact, a key part of his strategic pivot to Asia, suffered a major blow at the hands of Senate Democrats on Tuesday when they blocked debate on a bill that would have smoothed the path for the deal.
The stunning outcome cast doubt on the Trade Promotion Authority (TPA) "fast track" bill which is key to the Obama administration's ability to complete the 12-nation Trans-Pacific Partnership (TPP).
Washington's negotiating partners say enacting U.S. fast-track legislation to expedite passage of any trade deal is vital to clinching an agreement that would create a free trade zone covering 40 percent of the world economy.
"Each negotiation member nation considers the TPA bill indispensable towards an early agreement on TPP talks," said Japan's Chief Cabinet Secretary Yoshihide Suga told a news conference. Tokyo has long said TPP members would find it difficult to make trade concessions if the trade deal was subject to revision in the U.S. Congress.
"Japan strongly hopes an early enactment of the bill in the U.S.," Suga, the top government spokesman, told a regular news conference.
Failure to clinch a U.S.-led TPP agreement could also damage Washington's leadership image in Asia, where China is forging ahead with a new Beijing-led Asian Infrastructure Investment Bank (AIIB) without the participation of the United States and Japan.
The Senate voted 52-45 - short of the 60 votes needed - to pave the way for debate on the "fast-track" trade authority for Obama. "What we just saw here is pretty shocking," said Senate Majority Leader Mitch McConnell, a Republican.
The vote marked a victory for Senate Democratic leader Harry Reid, an outspoken opponent of fast-track, after weeks of speculation that the toughest fight would be in the House of Representatives and not the Senate.