Economists Forecast No Interest Rate Hike For Canada Until July 2011
Ottawa, Ontario, Canada (AHN) – Economists agree that the Bank of Canada will likely keep interest rates at its present level until July 2011.
They believe that Bank of Canada Governor Mark Carney will wait for developments in the U.S. economy and the eurozone.
The Canadian central bank is expected to release its decision on the key lending rate on Tuesday after the monetary board meeting.
The current key lending rate is still a low 1 percent. The governor kept it at that level due to uncertain economic conditions and a lower-than-expected third quarter growth rate due to weak trade and real estate investments.
The fixed-income markets predict 50-50 odds that the Bank of Canada will increase key lending rates in March and 100 percent chance in April.
According to the C.D. Howe Institute, the central bank should keep benchmark interest rates on Tuesday and on Jan. 18. It also forecast that by July next year the key lending rate should not exceed 1.5 percent.
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Oil firm; eyes on Irish bailout loan, China
Oil rose above $82 a barrel on Friday on a stronger euro ahead of an expected bailout of Ireland as well as on expectations China could lift interest rates to curb inflation.
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Oil falls below $82
Oil fell below $82 a barrel along
with falls in broader markets due to renewed
worries China may hike interest rates to fight inflation. |||
Oil fell below $82 a barrel along
with falls in broader markets on Wednesday due to renewed
worries China may hike interest rates to fight inflation.
Feeding into market expectations, Chinese Premier Wen
Jiabao said his government was preparing steps to tame price
rises, the official Xinhua news agency reported late on Tuesday.
U.S. crude oil futures briefly fell more than $1 to $81.18 a
barrel, the lowest intraday-price since Oct. 29, and they were
trading 76 cents lower at $81.58 by 1228 GMT.
ICE Brent crude was trading 65 cents lower at $84.08, having
touched as low as $83.57.
U.S. crude fell for the fourth day, losing more than 7
percent of its value since it struck a two-year high of $88.63
on Thursday.
“The market has not found support yet. It is the demand side
and questions about the U.S. dollar and China’s capacity to
consume energy going forward,” said David Taylor, an analyst at
CMC Markets in Sydney.
The tendency of China’s central bank to raise interest rates
around the 20th day of the month makes this Friday a “sensitive
window” for a rate rise, an official newspaper said on
Wednesday, citing unnamed analysts.
China has overtaken the United States to become the world’s
largest energy consumer. Any slowdown to the Chinese economy may
lead to a dent in its energy demand, which has been growing
rapidly.
But some market participants said Chinese demand should
still support oil and commodities prices in the long term.
“Anything that acts as a gentle brake on the runaway growth
in China will be a very good thing in the longer term,” said
Christopher Bellew with Bache Commodities.
“And if it causes commodity prices to fall, it will only be
the short term.”
Bellew added a strong dollar was also weighing on oil prices
in the short term.
The dollar pushed up to near a seven-week high against the
euro on Ireland’s debt crisis while high-yielding currencies
suffered.
Risk aversion typically prompts investors to reverse bullish
bets across commodities.
Ireland committed itself on Wednesday to working with a
European Union-IMF mission on urgent steps to help its stricken
banking sector, a process that could lead to a bailout despite
Dublin’s deep reluctance.
A team from the European Commission, the International
Monetary Fund and European Central Bank will travel to Ireland
on Thursday to examine what measures may be needed if Dublin
decides to seek aid, euro zone finance ministers said.
Later in the day, the oil market focus will shift to weekly
oil data from the U.S. government.
Analysts in the Reuters poll forecast the data would show a
100,000 barrel increase in the U.S. crude oil stocks in the week
to Nov. 12.
Late on Tuesday, a separate set of data from the industry
group American Petroleum Institute showed crude oil inventories
declined by 7.7 million barrels in the week. Investors were
holding off ahead of the EIA numbers to see whether the big and
unexpected fall is confirmed. – Reuters
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US Dollar Forecast Turns Bearish on Fed Actions, S&P 500 Rallies
The highly-anticipated Federal Open Market Committee interest rate announcement sent the US Dollar reeling against the Euro and other key currencies, and the sharp break suggests the Greenback may continue to drop through upcoming trade. For weeks now we have argued that the USD’s fate may depend on the FOMC’s subsequent actions.
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EIB keen on financing solar park project in India
European Investment Bank has expressed interest in financing solar park projects in India, the Asian Development Bank senior investment specialist Don Purka said on Thursday.
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RBI Raises Interest Rates For 6th Time In 2010
New Delhi, India (AHN) – For the sixth time in 2010, the Reserve Bank of India (RBI) increased the interest rates by another 25 basis points (bps) just to check the inflation rate, which has shown no signs of reduction for the past more than one year.
The repo rate at which the RBI lends to commercial banks was raised to 6.25 percent while the reverse repo rate, at which it pays to banks for deposits, was increased to 5.25 percent. The Cash Reserve Ratio (CRR), which is the amount of money commercial banks need to keep with the Central bank, however, remained unchanged at 6 percent.
The hike in the interest rates is not at all surprising, especially in wake of the fact that India has been the foremost nation in the whole Asian region, to fight back the soaring inflation rates with frequent hikes in the interest rates. Experts believe that it is this approach that has made India one of the few countries to recover so well after the 2008 global economic crisis.
Speaking with regard to the second quarter monetary policy review, RBI Governor Duvvuri Subbarao said, “Based purely on current growth and inflation trends, the Reserve Bank believes that the likelihood of further rate actions in the immediate future is relatively low.”
According to the latest key data in the RBI’s November 2, 2010 review, the annual wholesale price index for September was up by 8.62 percent as compared to 8.5 percent in August. The inflation rate in food, also remained high, despite easing down to 13.75 percent in the middle of the October month.
The apex bank’s policy review also noted that the “growth-inflation outlook” was likely to dominate the policy response.
Allaying public fears with regard to loan facilities to purchase home and car, the RBI said that the cost of such loans would not increase immediately.
Explaining this further, Chairman of the nationalized State Bank of India, O. P. Bhatt said, “The transmission mechanism between RBI and rest of the financial system does not work very fast. It always works with a time lag.”
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IMF Backs Bank Of Canada’s Decision To Maintain Interest Rates
Ottawa, Ontario, Canada (AHN) – An International Monetary Fund staff mission to Canada has backed the decision by the Canadian central bank to keep interest rates at their present level. The mission said the benchmark rate strikes the right balance between risks to the outlook and Canada’s advanced expansion.
However, the IMF warned Ottawa Thursday not to be complacent because weakening global demand, high household debt and protectionism could slow down Canada’s economic recovery.
Because of these threats, IMF Mission Chief for Canada Charles Kramer said in a statement, “In this context, Canada faces three main policy challenges: managing the exit toward a neutral macroeconomic policy stance; cementing fiscal stabilization; and incorporating the lessons from the crisis for financial supervision and regulation.”
Kramer said Canada is in a good position to adapt to international financial reforms that would improve supervision and regulations. He said Canada’s resilience during the crisis provides lessons on arrangements for promoting stability.
The IMF will release its final findings on Canada by the end of 2010.
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China Sparks Wide Sell-Off
China surprised investors by raising interest rates, sparking a world-wide sell-off in stocks, commodities and emerging-markets currencies as investors lowered their expectations for Chinese growth, which has been seen as a key driver of the global economy.
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Chinese Hike Hits Equities, Commodities
News that China’s central bank is set to raise interest rates ramped up speculation that global political powers could be nearing a deal on exchange-rate tensions.
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FE Editorial : Rupee versus revival
The steady appreciation of the rupee by close to 9% against the dollar since May has pushed exporters into a frenzy. It doesn’t help that the Japanese move to keep interest rates at near zero and the sluggish growth in the OECD implies India could be faced with a flood of inflows
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- Business Loans
- Consumer credit card debt down
- Remittances to developing countries rebound
- Fixed mortgage rates steady near 4 percent
- Bank fee hike gives credit unions a boost
- Study: Canadians want to retire at 63
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- Private Personal Loans
- personal loans
- Fitch downgrades Greek sovereign debt
- U.S. Treasury should make $15 billion profit on AIG bailout
- Costco to offer mortgages
- Medicare to tie doctors’ pay to quality, cost of care
- Report: E-books encouraging reading in America
- Justice Dept. Broadens Investigations of Terrorism in Private Records
- Gold falls following Fed policy decision
- Average rate on 30-year fixed mortgage falls to 3.9 percent
- Stocks cross 13,000 for first time since May 2008
- CIA site down, Anonymous claims responsibility
- Personal and Business Loans
- Initial jobless claims remain unchanged
- Fitch downgrades Greek sovereign debt
- Moody’s downgrades credit of 26 Italian banks
- Initial unemployment claims drop by 1,000
- Fannie Mae not seeking new bailout funds after good quarter
- Mortgage rates fall to record low
- Spain, economic data weigh on U.S. stocks
- Costco to offer mortgages
- U.S. stocks mixed Thursday on weak jobless claims
- Short sales up in housing market
