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

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VIX: $20.69 14/3/21 

Important fundamental releases: 15th to 19th March 2021

  • 08:30 am Tue 16th Mar USD Retail Sales 
  • 08:30 am Wed 17th Mar CAD CPI
  • 02:00 pm Wed 17th Mar USD FOMC Statement
  • 05:45 pm Wed 17th Mar NZD GDP
  • 08:30 pm Wed 17th Mar AUD Employment
  • 08:00 am Fri 18th Mar GBP Interest Rates  
  • 0-:00  Fri 18th Mar JPY Interest Rates 

Latest Central Bank statements:

USD FOMC: 27th 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.  

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