Archive for April, 2008
Poland: Unchanged rates - end of tightening cycle?
The Polish central bank (NBP) has announced that it has left its key policy rate unchanged at 5.75% – in line with the consensus expectation and our (revised) expectation, cf our Flash Comment “Poland: We cave in - unchanged rates tomorrow”, 29 April, 2008.
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Poland: We cave in - unchanged rates tomorrow
Until now we had expected that the Polish central bank (NBP) would hike its key policy rate by another 25bp to 6.00% at tomorrow’s Monetary Policy Council meeting. However, as of today we have changed that forecast so we now – in line with the consensus expectation – expect the NBP to keep rates unchanged. The reason for this is that today we received more information to show that growth is slowing.
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Monetary-policy meeting at the Federal Reserve
Interest-rate announcement Current interest rate: 2.25% • In favour of unchanged interest rates: • very sharp cuts since the turn of the year • several FOMC members have expressed their concern about inflation • In favour of 25 bp cut: • wage increases will fall along with a rise in unemployment • still problems in the financial sector • traditionally, the Fed cuts rates to below 2% during a recession Market expectations: -25 bp Jyske Bank’s expectations: -25 bp
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Japan: Bank of Japan preview
The Bank of Japan (BoJ) on Wednesday April 30 is to announce its interest decision from its two day monetary policy meeting starting tomorrow. In line with the widely held view in the market, we expect the BoJ to leave its leading O/N target rate unchanged at 0.5%. However, this weekÂ’s monetary policy meeting could still be interesting for two reasons. Firstly, BoJ will release board membersÂ’ revised forecast for GDP and inflation. The size of the growth revision will give some idea where
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Hungary: MBH hikes again
The Hungarian central bank (MNB) today has hiked its key policy rate to 8.25% – in line with the consensus expectation, but contrary to our expectation of unchanged rates. Today’s decision once again confirms the MNB’s commitment to fighting inflation – despite the fact that economic growth remains very subdued in Hungary. Today’s rate hike undoubtedly must be seen in light of the fact that inflation remains above the MNB’s inflation target. Furthermore, inflation risks are probably twisted to
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Russia: Central bank tightens monetary conditions further
The Russian central bank (CBR) has said today that it has raised all of its interest rates to deal with RussiaÂ’s rising inflation. Most importantly, the CBR has raised the floor for its one-day repo rate, the CBRÂ’s key refinancing tool, to 6.50% from 6.25%. Furthermore, the CBR lifted its rarely used refinancing rate, which serves as a ceiling for all official interest rates, to 10.50% from 10.25%. Short-term deposit rates were raised to 3.25% from 3.00%.
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FOMC: Cuts slowing, but is the Fed finished?
Financial markets have shown some signs of recovery in the past three to four weeks (see Financial Crisis update), and this has formed the backdrop for the recent strong increase in yields. Higher yields mean that the market now expects the Federal Reserve to make do with cutting its key rate by 25bp to 2% at next weekÂ’s meeting and then keeping it unchanged for the rest of the year. In other words, the pressure on the central bank to cut further has eased considerably compared to expectations
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The Beach Ball
Have you ever tried to hold a beach ball under the water? You might be successful for few moments, however it only takes a small change in how you are holding it to make it burst up out of the water, hit you in the face and splash you all over. Sometimes, we as traders try to hold the beach ball under the water. We want the big success, the big win, the huge profits, etc. in a short timeframe. This rarely happens. What are your current trading traits? What do you expect of yourself? Are you
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The Beach Ball
Have you ever tried to hold a beach ball under the water? You might be successful for few moments, however it only takes a small change in how you are holding it to make it burst up out of the water, hit you in the face and splash you all over. Sometimes, we as traders try to hold the beach ball under the water. We want the big success, the big win, the huge profits, etc. in a short timeframe. This rarely happens. What are your current trading traits? What do you expect of yourself? Are you
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The Daffodil Principle
Trading success takes discipline, passion and continuous learning just to name a few. One additional area that seems to be evident in all traders that keep enhancing their skills and their profits is the ability to ask good questions of themselves and then to apply the answers immediately. To reach new goals takes new steps that must start now and are not delayed until tomorrow. Listen to the author's thoughts
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