BOE Gov Carney speaks – Clues on rate hike?


20 October, AtoZForex.com, Lagos – China made it to the headlines yesterday, as the GDP figure surpassed forecast to come at 6.9 percent year on year in Q3. Although lower than previous of 7 percent, it beats forecast of 6.8 percent. The data revived expectations of further stimulus, having already cut rates five times since November last year.

Also, the PBOC has cut the reserve requirement ratio thrice this year. Alongside, retail sales edged up a notch to 10.9% yoy in September, from 10.8% yoy previously. On the other hand, industrial production and fixed assets investment decelerated from the previous month. Later this week, the data that are in the pipeline for release will likely show a slowdown in exports and decelerating inflation.

Australia Monetary Policy Meeting Minutes

According to the Reserve bank of Australia, the low Aussie and ultra-low official interest rates are helping the economy adjust to the end of the resources boom and have strengthened the labour market. Amidst signs of the economy is rebalancing towards non-mining investment, with the June quarter’s growth figures dragged down, by what appeared to be “temporary weakness” in resources exports.

Accordingly, they clarified that the main domestic risk to financial stability, and the economy more broadly, continue to come from the housing market. Furthermore, it was clarified that the Labour market strengthened more than expected. All in all, the RBA needs to cut the benchmark cash rate below 2 percent, any time soon.

BOE Gov Carney Speaks (10:00 A.M GMT)

In his last speech, Gov Carney clarified that the huge accumulation of debt in emerging markets poses one of the biggest risks to the global economy at the moment. As regards to impending interest rate hikes, he stated that the Bank of England would not specifically wait for the US Federal Reserve to tighten policy, before it raises interest rates. Considering, he suggested that a rate rise in early 2016 was still in play.

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Forasmuch as expectations that the Fed may likely wait till next year before raising rates, it remains unclear if the BOE can beat the UE Fed to rate hikes from record lows. Further insights, in regards to this matter is highly expected in today’s speech of Gov Carney.

US building permits ( 12:30 P.M GMT)

The housing recovery in the US has remained bumpy. The building permits, which is a proxy for future construction, climbed 3.5 percent to a 1.17 million annualized rate last month. It is now forecast to come in at 1.16m, as the housing sector continues to look slow in recovery.

NZD Global dairy trade Price Index (Tentative)

The index shows the change in the average price of dairy products sold at auction. It is a leading indicator of the nation’s trade balance with other countries because rising commodity prices boost export income, considering the level of the county’s reliance on dairy export income.

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