The pound has broken through 9.1!
The pound rose after the Bank of England meeting, and the market postponed bets on the timing of the implementation of negative interest rates
Money markets will implement negative interest rates in the UK Bets on timing have been pushed back to February 2022 after the Bank of England said on Thursday it would take at least six months for banks to be ready for interest rates to drop below zero.
After the Bank of England issued a statement, the pound rose 0.2% against the U.S. dollar to $1.3675. The market was relieved that the United Kingdom had no immediate plans to implement negative interest rates. Before the statement, the pound fell as much as 0.5% against the U.S. dollar.
The pound rose 0.8% against the euro to 0.8752 pounds, hitting its highest level since May 2020.
UK bank shares rose 2% to their highest level in more than a week, after falling earlier. The 10-year British bond yield rose to its highest level since November last year.
The British FTSE 100 index narrowed its losses, falling 0.3% on the day, benefiting from the boost of banking stocks.
The Bank of England said it would ask banks to prepare for the possibility of negative interest rates, but financial markets should not take the implementation of negative interest rates as a certainty.
John Woolfitt, director of Atlantic Capital, said: “The Bank of England did sound mildly optimistic about the economic outlook, which in turn boosted the pound and weighed on the British market.”
” They also stressed that while they do not want to implement negative interest rates at the moment, they would not rule it out if needed.”
Other news announced by the Bank of England was in line with investor expectations.
As expected, the Bank of England kept its benchmark interest rate unchanged at 0.1% and its asset purchase target at 895 billion pounds ($1.22 trillion).
Money markets delayed expected interest rate cuts by six months to February 2022, and then to December 2021. Ahead of the Bank of England’s statement, markets were betting the central bank would cut interest rates below zero in August 2021.
The 10-year British bond yield rose to the highest since March 2020, rising 9 basis points on the day. The two-year British bond yield rose to minus 0.001%, up 7 basis points on the day. The two-year/10-year British bond yield spread reached its widest level in nearly a year, at 47 basis points, from 32 basis points previously.
In 2020, the British economy shrank by nearly 10% due to the COVID-19 epidemic, the largest decline in more than 300 years.
The British economy was ravaged by the COVID-19 epidemic and suffered the largest decline in output in more than 300 years in 2020, with a drop of 9.9%. However, it avoided falling into recession again at the end of the year and is expected to recover in 2021.
UK gross domestic product (GDP) grew by 1.0% in the fourth quarter, official data showed, which was the high end of the range forecast by economists polled by Reuters.
This makes it possible for Britain to escape two consecutive quarters of economic contraction, which is the European standard for defining a recession. But the British economy will shrink in early 2021 due to the impact of the third COVID-19 lockdown.
December “We still expect a strong economic rebound as restrictions ease,” said Dean Turner, economist at UBS Global Wealth Management. The UK economy grew by 1.2%, with output falling by 2.3% in November as a result of the partial lockdown, a sign that the country is better able to cope with coronavirus restrictions than at the start of the pandemic. The Office for National Statistics said this left economic output 6.3% lower than before the outbreak in February.
However, the Bank of England predicts that the British economy will shrink by 4% in the first three months of 2021 due to a new round of blockades and disruption caused by Brexit.
Last year’s fall in output was the largest since modern official records began after World War II. Judging from long-term historical data kept by the Bank of England, this is the largest decline since the “Great Frost” in 1709.
UK GDP has fallen more sharply than almost any other large economy, although GDP in Spain, also hit hard by the epidemic, fell by 11%.
The decline partly reflects the UK economy’s greater reliance on face-to-face consumer services than other countries, and also the disruption to schooling and routine medical care that other countries rarely include in GDP.
The Australian dollar has soared 30% compared to a year ago!
In 2020, the Australian dollar rose by 38%.
After the start of 2011, the Australian dollar’s rise has been even stronger.
On the whole, despite the short-term downward trend in the Australian dollar exchange rate at the end of last month.
But after entering the month, the Australian dollar exchange rate officially started an upward trend, rising all the way from 4.9 to a level close to 5.1.
And the upward trend continues. The last time the Australian dollar exchange rate performed like this was in November 2018.
Commodity prices rise
The Australian dollar rose nearly 1.50% against the US dollar last week, with rising commodity prices boosting the pair’s prospects.
Iron ore is one of Australia’s main exports and benchmark futures prices surged late last week as Chinese markets reopened after the Lunar New Year holiday, with iron ore now trading close to 10-year highs High Point.
Three years of low interest ratesDue to changes in the economy, the Australian central bank is printing money like crazy
Previously, the Australian central bank also officially announced that it would maintain the benchmark interest rate at 0.1%.
And Prime Minister Morrison also confirmed that interest rates will remain at historically low levels for at least three years.
China-Australia bilateral trade in goods achieved a slight increase of 0.88% in 2020
According to data released by the Australian Bureau of Statistics, the total bilateral trade in goods between China and Australia in 2020 was 229.623 billion Australian dollars, year-on-year. An increase of 0.88%. Among them, China’s exports to Australia increased by 6.54% to 84.435 billion Australian dollars; China’s imports from Australia fell by 2.15% to 145.188 billion Australian dollars.
The latest epidemic situation in Australia, according to real-time information data, as of February 24, Hong Kong time, the total number of confirmed cases of new coronary pneumonia in Australia exceeded 20,000, reaching 28,939, and the number of deaths reached 909.
The New Zealand dollar also rose by more than 20%
On Wednesday, New Zealand announced its interest rate decision as scheduled. Although the official cash rate remained unchanged at 0.25% and the old tune continued to keep interest rates low through large-scale asset purchases and loan financing plans, NZD/USD once rose 68 points against the US dollar, continuing to expand its gains since February. The New Zealand dollar has now broken above 0.7350 against the US dollar and has appreciated 16% in the past 12 months.
The ongoing pandemic is the biggest doubt about the economic outlook. While New Zealand has managed the outbreak better than most countries, travel restrictions and other measures to control the spread of the virus will continue to impact the economic recovery. Effective international vaccine distribution and other epidemic control measures will have an important impact on the speed and depth of the global recovery.
The Canadian dollar benefited from rising oil prices. Canada has abundant oil reserves, most of which are exported to the United States through oil pipelines. In his speech on January 21, Bank of Canada Governor Macklem himself said: “The Canadian dollar is expected to appreciate further.” USD/CAD has now fallen below the 1.2600 level, and the next support level may be near 1.2000.
The Central Bank of Kyrgyzstan raised the discount rate by 50 basis points to 5.5% for the first time in a year
The Central Bank of Kyrgyzstan raised the discount rate by 50 basis points to 5.5% for the first time in a year. The Central Bank of Kyrgyzstan explained that due to the epidemic, Kyrgyzstan’s economy and trade were greatly affected in 2020. Due to the continued rise in food prices in the international market, Kyrgyzstan’s inflation rate was serious. In February 2021, Kyrgyzstan’s inflation rate increased by as much as 10.2% on an annual basis. It is planned to increase the consumption tax on tobacco and alcoholic goods in the first quarter, which will further increase inflation. In addition, the interbank money market was active in 2020, and the level of excess liquidity in the financial system was high. In view of the above reasons, the central bank decided to increase the discount rate and reduce the risk of inflation, with a view to controlling the inflation level to single digits from the middle to the end of the year.
The Brazilian Central Bank predicts that Brazil’s economic growth will be 3.43% in 2021
The Brazilian Central Bank released the latest economic report, The Pakistani economy is expected to shrink by 4.3% in 2020 and grow by 3.43% and 2.5% in 2021 and 2022 respectively. Pakistan’s official inflation rate is forecast to be 3.62% this year, and the year-end benchmark interest rate is 3.75%. The exchange rate of US dollar to real at the end of the year was 1:5.01.
The Bank of Zambia raised the monetary policy interest rate to 8.5%
The Bank of Zambia (BOZ) released news on February 17. The central bank’s Monetary Policy Committee (MPC) decided to raise the monetary policy rate by 50 basis points to 8.5%, aiming to curb rising inflation and stabilize inflation expectations, which is crucial to supporting the stability of the financial system and economic recovery.
Governor Christopher Mvunga said that over the next eight quarters, inflation is expected to deviate further from 6-6 due to the lagged effects of the kwacha devaluation and continued high fiscal deficits. At the upper end of the 8% target range, risks to the inflation outlook are assessed to be biased to the upside. If inflationary pressures persist, the central bank stands ready to further raise policy rates and tighten monetary policy.
South Africa’s inflation rate rose slightly in January
Suffering from rising food prices and service costs, South Africa’s inflation rate as measured by the Consumer Price Index (CPI) in January The inflation rate increased slightly. Statistics South Africa released data on Wednesday showing that the inflation rate rose to 3.2% in January from 3.1% in December last year, lower than the 3.3% forecast by Bloomberg. Among them, miscellaneous goods and services categories including insurance increased by 6.5% year-on-year; food and non-alcoholic beverages increased by 5.4% year-on-year; housing and utilities increased by 2.6% year-on-year. Considering that the current inflation rate is below the midpoint of the South African Reserve Bank’s target range of 3%-6%, expectations for a rate cut by the Reserve Bank have once again increased, and inflation data in early 2021 will be closely watched.
The South African Chamber of Commerce and Industry (SACCI) released a trade status survey report showing that South Africa’s trade activities suffered in December and January due to the impact of the second wave of the COVID-19 epidemic and the subsequent re-implementation of strict lockdown measures during the holidays. The trade activity index fell from 47 points in November to 39 points in December, and further fell to 34 points in January. The trade expectations index fell from 43 points in December to 38 points in January. In addition to the impact of the epidemic, respondents are also concerned about the impact of factors such as slow business recovery momentum, uncertainty about the duration of lockdowns, crumbling infrastructure and lack of maintenance, and poor service delivery by local governments. </p
