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Daily Digest 9/30 - Household Debt Rises, Fed Ready With More Stimulus

Wednesday, September 30, 2015, 9:08 AM


Fed ready with more stimulus if economy slumps -Evans

Responding to audience questions at Marquette University, Evans said additional bond purchases, known as quantitative easing, are an option if more monetary stimulus is needed. "We need to consider those Plan Bs," he said, noting the global environment continues to be challenging.

Abe adviser calls for extra stimulus in Japan

Japan needs more economic stimulus to stave off a serious shock from China, according to one of Prime Minister Shinzo Abe's closest advisers.

Global trade to grow at slowest pace since financial crisis: BOK (Korea)

Global trade in 2015 and 2016 is expected to grow at the slowest pace since the financial crisis, which could pose serious challenges for an export-oriented economy like South Korea, the central bank said Tuesday.

IMF downgrades 2015 economic forecast on Russia to minus 3.8% of GDP

The International Monetary Fund (IMF) downgraded its economic forecast for Russia as it projects recession of 3.8% in GDP for 2015 and of 0.6% for 2016 in its new analytical research prepared to annual meeting, TASS correspondent reports with reference to informed sources.

Credit Suisse warns of oil losses pummeling banks in Norway

The fallout of lower oil prices already has had a huge impact on Norway's economy. Its central bank unexpectedly cut interest rates last week to a record low and signaled it may ease further as a 50 percent drop in Brent crude over the past year kills jobs in western Europe's biggest oil producer.

Central Bank in Denmark Loses Tool After Debt Funding Need Jumps

Well after markets had closed on Monday night, AAA-rated Denmark’s government revealed it will need to borrow 153 billion in kroner ($23.5 billion) next year, 6.3 percent more than estimated in August. This year’s borrowing need was revised up by 4.8 percent, to 132 billion kroner.

IMF says Sweden needs to do more to cool housing market

"Housing prices are rising fast from elevated levels, resulting in households taking on higher debt burdens and making the economy more vulnerable to shocks," the IMF said in its annual report on Sweden.

German inflation turns negative in Sept for first time in 8 months

German annual inflation turned negative in September for the first time in eight months, preliminary data from the Federal Statistics Office showed, undershooting the consensus forecast for consumer prices in Europe's largest economy to stagnate.

Malaysia faces another bond litmus test as contagion worries grow

Foreign investors could pull up to another billion dollars out of embattled Malaysia's bond markets this week, pushing the country a step closer to a currency reserves crisis that would send shudders across the region.

Brazil's Broadest Inflation Index Faster Than All Estimates

Inflation in Latin America’s largest economy is running at more than double the official target, as the currency loses value and pushes up the price of imports. The central bank ended its monetary tightening cycle this month, holding interest rates at their highest since 2006. Even so, traders are betting the monetary authority will be forced to tighten further.

European Yields Reflect Slow Inflation Adding to Pressure on ECB

The rout in equities and commodities, together with the prospect of China’s slowdown dimming the outlook for global growth, has boosted buying of sovereign debt on speculation central banks will maintain or extend stimulus. Spanish bonds extended Monday’s gains as a report showed consumer prices dropped in September by the most since February.

Bubble Seen in China Bonds as Record Borrowings Raise Stakes

The credit market is “overheating,” according to nineteen of 21 respondents in a survey of onshore analysts, traders and fund managers. Chinese companies sold a record 3.5 trillion yuan($550 billion) of notes this quarter, up 90 percent from the same period last year, as borrowing costs plunged to six-year lows. Risks of a bubble have emerged, according to Industrial Securities Co. and Huachuang Securities Co.

Indonesia c.bank official sees room to cut rates if inflation falls

"If we are looking at domestic factors alone, if inflation falls and to support growth, there is room (to cut rates)," Warjiyo said.

Household debt rises at fastest pace in nearly three years (Canada)

The central bank released new data showing that total Canadian outstanding household credit rose to $1.869-trillion in August, up an annualized pace of 5.9 per cent from July. Compared with a year earlier, household debts were up 5 per cent, the highest year-over-year increase since October, 2012.

Analysts Cut 2015 and 2016 Growth Forecasts for Brazil

Analysts surveyed by the Central Bank expect Brazil’s gross domestic product (GDP) to contract by 2.8 percent in 2015 and 1 percent in 2016.

Offshore Yuan Gains as Record Loan Rate Linked to Intervention

“It looks like further intervention today,” said Michael Every, Hong Kong-based head of financial markets research at Rabobank Group. “What purpose this kind of intervention actually serves is hard to say. It certainly does no favors for the yuan as a reserve currency.”

Brazil Currency Volatility Climbs as Central Bank Adds Support

The central bank sold 20,000 foreign-exchange swap contracts worth $987.6 million Tuesday and will offer $2 billion in credit lines to support the real. Officials resumed new sales of the instruments Sept. 23 after ending a similar program in March.

‘Cold Fusion’ Is Citi's Answer to Fading Central Bank Firepower

As the International Monetary Fund prepares to downgrade its outlook for the world economy again, monetary policy makers are running low of ammunition to fight a fresh downturn. Bank of America Merrill Lynch calculates they have reduced interest rates more than 600 times since the 2008 collapse of Lehman Brothers Holdings Inc. with the Reserve Bank of India extending the run on Tuesday by cutting its benchmark more than expected.

India central bank cuts key interest rate to 6.75%

The central bank said Tuesday it is marking down its growth forecast for this fiscal year, which ends in March, to 7.4% from 7.6%.

Icahn sees ‘danger ahead’ over zero rates, junk bonds

Those bonds, he said, are extremely risky and being sold “en masse” to the public, who he says don’t really understand what they are buying. The numbers on that market are “amazingly risky,” he argued, noting growth in that market has been incredible, with the junk bonds and leveraged loan market now worth $2.2 trillion, up $1 trillion from five years ago.

Spanish inflation dives, falls to -1.2%

Spain's consumer prices fell in September at their fastest pace in six months, driven by a decrease in energy costs that some economists expect could lead to months of falling prices in the eurozone's fourth-largest economy.

Gold & Silver

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Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Australian Carnage

Despite carnage for local mining and energy stocks, nothing in Australia matched Glencore's near 30 per cent plunge in London overnight and a matching slump in Hong Kong on Tuesday.


I'm guessing that this isn't the end of the story. 

saxplayer00o1's picture
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 4237
Repost Of Today's News


Loss of central bank traction puts mandates under scrutiny

Reuters - ‎9 hours ago‎
Chief among the questions is whether the world's most influential central bank, along with many of its peers, is trapped at near zero interest rates as the economic cycle crests and inflation flatlines, due to a rapid cooling of China and other ...

Singapore central bank seen likely to ease policy in October: Reuters poll

The Fiscal Times - ‎11 hours ago‎
SINGAPORE (Reuters) - Singapore's central bank will probably ease monetary policy in October due to the rising risk of a recession and downside risks to the inflation outlook, a Reuters poll showed. Twelve of 18 analysts surveyed said their baseline ...

Offshore Yuan Set for Best Month Since 2011 as Intervention Seen

Bloomberg - ‎6 hours ago‎
The offshore yuan, trading stronger than the Shanghai spot price for the first time since July, posted the biggest monthly advance in four years amid bets China's central bank is propping up the currency as it looks to unite the two rates. The People's ...

China central bank lowers mortgage down payment requirement in many cities

The Straits Times - ‎5 hours ago‎
BEIJING (REUTERS) - China's central bank and banking regulator said on Wednesday they would be lowering the minimum down payment requirement for first-time home buyers in many cities to 25 per cent from 30 per cent, in an effort to support the ...

Brazil's central bank revises up 2015 gross debt forecast

Reuters-2 minutes ago
The bank's economic research chief, Tulio Maciel, said the revision was due to the government's cut of the primary budget surplus goal to 0.15 percent of GDP ...

Confidence in China''s Economy Declines, PBOC Survey Finds

Nasdaq - ‎5 hours ago‎
BEIJING--Confidence in the Chinese economy among bankers and entrepreneurs was falling, a central bank survey showed Wednesday, as the world's No. 2 economy showed more signs of weakness despite the government's efforts to shore it up. The index ...

Ringgit's Slide Spurs Worst Quarterly Bond Losses in Six Years

Bloomberg - ‎9 hours ago‎
Central bank Governor Zeti Akhtar Aziz reiterated on Wednesday that there's no plan to re-peg the ringgit. It was fixed at 3.8 to the dollar in 1998 during the Asian financial crisis, a measure that stood until 2005. It rallied 1.4 percent to 4.3955 on ...

Thai central bank trims growth forecast for 2015, 2016

Shanghai Daily (subscription) - ‎10 hours ago‎
BANGKOK, Sept. 30 (Xinhua) -- The Bank of Thailand (BOT) has revised down its growth projections for 2015 and 2016 to 2.7 and 3. 7 percent, respectively, the bank said Wednesday. From the second quarter to July 2015, the Thai economy gradually ...

Indonesia Central Bank to Intervene in Forward Rupiah Currency ...

Jakarta Globe-7 hours ago
Indonesia's central bank plans to intervene in the forward market for rupiah, ... A recent regulation from Indonesia's central bank that enforces local businesses to ...

Bank of Japan Can't Wish Away Looming Recession

Wall Street Journal-6 hours ago
The central bank could dial up its purchases of exchange-traded funds substantially from the current ¥3 trillion a year. Stock-market investors would no doubt ...

Japan factory output slides unexpectedly, risks of recession rising

Reuters - ‎14 hours ago‎
As a slowdown in China chills global growth, hitting export-reliant Asia particularly hard, analysts say the Bank of Japan may be forced to offer fresh stimulus as early as next month in a bid to get the faltering economy back on track. "In the absence ...

Japan on brink of technical recession

Financial Times - ‎7 hours ago‎
Last week Janet Yellen, US Federal Reserve chair, implicitly criticised the BoJ's policy, noting in a speech: “I am somewhat sceptical about the actual effectiveness of any monetary policy that relies primarily on the central bank's theoretical ability ...

Poland's Belka Sees Rates Low Long-Term in Emerging Markets ...

Nasdaq-5 hours ago
BUDAPEST--Poland's central bank central bank chief, Marek Belka, said global factors are likely to keep interest rates low in the longer term in Europe's ...

Emerging Debt Trap: The Turkish Bonds That Trade Twice a Day

Bloomberg-5 hours ago
“Investors fear they could get stuck holding Turkish debt, especially in light of the central bank's signals that it will raise interest rates in response to Federal ...

Bundesbank chief warns of risks from cheap money

Reuters - ‎21 hours ago‎
The remarks from Weidmann illustrate the continued scepticism in Germany about the need to extend the European Central Bank's 1-trillion-euro-plus money printing program. While such opposition cannot prevent extra money printing, it can delay any such ...

Asian Currencies Have Worst Quarter in Seven Years on Fed, China

Bloomberg-5 hours ago
Taiwan's dollar slid to a six-year low after its central bank reduced interest rates last week for the first time since 2009. The People's Bank of China lowered ...

Asian Markets Wrap Up One of Worst Quarters Since Financial Crisis

Wall Street Journal-4 hours ago
While calming words from some regional central bankers during the quarter's last .... Malaysia's ringgit rose as much as 1.5% Wednesday after its central bank ...

UPDATE 1-China sees capital account deficit, volatile fund flows in H2

Reuters - ‎9 hours ago‎
China will keep the yuan basically stable while improving management of its foreign exchange reserves to ensure safety, the regulator said. China's central bank has intervened heavily to keep the yuan steady after it shocked global markets by devaluing ...

China arrests 75 in crackdown on underground banks

Reuters-3 hours ago
Fears over an economic slowdown and market instability have sparked a wave of capital outflows this year. Chinese law prohibits people from transferring more ...

EMs' worst outflows since 2008: Five key charts

CNBC - ‎10 hours ago‎
Countries from Mexico and Malaysia have been buffeted in recent months as investors take fright at the prospect of higher interest rates in the US, which dims the appeal of riskier emerging market assets. Higher capital outflows in many countries have ...

Chicago PMI slides into contraction territory in September

MarketWatch-1 hour ago
WASHINGTON (MarketWatch) -- A measure of Chicago-area manufacturing dropped sharply into contraction territory in September, according to data released ...

Euro-Area Inflation Rate Turns Negative as ECB Debates Stimulus

Bloomberg - ‎6 hours ago‎
The euro area's inflation rate unexpectedly turned negative in September for the first time in six months, adding pressure on the European Central Bank to bolster stimulus. Consumer prices in the 19-nation currency bloc fell 0.1 percent from a year ...

Europe needs €2.4 trillion to smash deflation threat, warn experts

Telegraph.co.uk - ‎23 minutes ago‎
But S&P's prediction that stimulus will continue into mid-2018 goes well beyond analyst expectations of a just a six-month extension. It would also more than double the bank's firepower to €2.4 trillion. "Even in the best case, we believe inflation ...

Eurozone should double QE stimulus to €2.4 trillion to smash deflation, warn ...

Yahoo Finance UK - ‎3 hours ago‎
The eurozone will need at least another three years of quantitative easing and €2.4 trillion of firepower to revive the bloc's flagging fortunes, rating's agency Standard & Poor's has warned. With unemployment stubbornly high and growth still bouncing ...

IMF's Lagarde warns global economic growth is slowing - live updates

The Guardian-8 hours ago
Strong labour market data in the US lifted the dollar, while the euro was already under pressure from the eurozone's return to deflation on the back of weaker oil ...

Romania Keeps Key Rate on Hold in Deeper Than Expected Deflation

Bloomberg-1 minute ago
Romanian policy makers kept the country's main interest rate unchanged for a third meeting as the central bank balances the impact of government plans to ...

France''s Borrowing Requirement to Rise in 2016

Nasdaq-3 hours ago
Out of the total borrowing requirements, EUR72 billion are for financing the deficit and EUR127.0 billion are for paying back medium- and long-term debt ...


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