15th – 19th March 2021 Fundamental Updates & Latest Central Bank Cliff notes

VIX: $20.69 14/3/21

Important fundamental releases: 15th to 19th March 2021

Latest Central Bank statements:

USD FOMC: 27^th January 2021

Economic activity and employment has been rising at a moderate rate. Job gains have been solid. Unemployment rate has remained low.
Household spending has been rising at a moderate pace, business fixed investment and exports remain weak.
IR: Maintain current rate 0 to 0.25%. Will maintain target range until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2% and are on track to exceed it.

CAD Bank of Canada March 10th 2021

Interest rates remain unchanged
QE will continue at a pace of $4billion per week.
Stronger demand is pushing up prices for most commodities, including oil. (Bullish(strength) for the currency)
A broad-based decline in the US exchange rate combined with stronger commodity prices have led to a further appreciation of the Canadian dollar.
Bank is watching CPI numbers to stay between the 1-3%

CHF Swiss National Bank: September 2020

GDP expects to stay below pre covid crisis level, shrink 5% since the start of the crisis.
Inflation: Inflation rate is (-0.6%) expected to edge back to positive. They are paying attention to inflation rate
IR: Keeping interest rate at -.075%
Willing to intervene more strongly in the foreign exchange market.

GBP Bank of England Feb 4th 2021

Inflation target at 2%
CPI inflation is expected to rise sharply towards the 2% target in the spring.
- If outlook for inflation weakens, the committee stands ready to take whatever additional action is necessary to achieve its remit.
- No intention of tightening monetary policy at least until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.
Will maintain bank rate at 0.10%
Will continue their version of QE
- Maintaining a target for government bond purchases at £875 Billion
Signs that consumer spending has softened across a range of indicators & investment intentions have remained weak.
Household spending expected to pick up in 2021 Q1 as covid restrictions loosen.
Q4 2020 GDP stronger than expected. Outlook of the economy remains unusually uncertain. Depends on the evolution of the pandemic.

JPY Bank of Japan Jan 21st, 2020

Decided to follow yield curve control
- Interest rates will remain at -0.10%
- Will purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields will remain at around 0%.
WIll continue their version of QE (buying Japanese government bonds) for another 6 months until September 2021.
The Bank will be monitoring if the CPI exceeds 2% and stays above the target in a stable manner.

EUR ECB March 11th 2021

PEPP will continue until the end of March 2022
- Or until the Covid Crisis is over.
Asset purchase programme will end shortly before ECB starts raising interest rates.
Will maintain Interest rates at 0.00%
- Will remain at this level until the Governing council sees inflation outlook get close to but below 2% within their projections.

NZD: RBNZ February 2021

Will continue their QE program until confident that consumer price inflation will be sustained at the 2% per annum target.
Inflation and employment expected to stay below targets over the medium term in the absence of prolonged monetary stimulus.
Leave interest rates at current level .25%

AUD: RB Of Australia 2nd March 2021

Will maintain interest rates at .10%.
- Will not increase the cash rate until actual inflation is sustainably within the 2% to 3% target range.
  - Key factor being employment.
Will continue their QE
- Decided to purchase an additional $100 Billion of bonds issued by the Government at $5 Billion per week.
Inflation remains low and below central bank targets.
CPI inflation is expected to rise temporarily because of the reversal of some COVID-19-related price reductions.
The outlook for the global economy has improved over recent months due to the ongoing rollout of vaccines.