Metals News
The economic situation is uncertain. A wave of interest rate cuts by central banks around the world are coming.
Jul 21,2019
The content below was translated by Tencent automatically for reference.

SMM News: British media said that the global economy or light or dark, the global central bank interest rate cut is coming.

Global currency markets have been cautious in the face of a wave of interest rate cuts this week, keeping a close eye on central banks.

The most striking is the prospect of the Fed cutting interest rates. The Fed is expected to cut interest rates for the first time in a decade at its policy meeting at the end of July. In addition, markets expect the ECB to ease monetary policy as early as next week. This expectation has taken a heavy toll on the euro.

Reported that this week, the Bank of Korea and the Bank of Indonesia have cut interest rates. The won fell after the Bank of Korea unexpectedly cut interest rates on the 18th, but then rebounded as Bank of Korea Governor Lee Chu-lie's dovish speech hinted at policymakers' determination to revive the economy, which some traders said could help attract capital inflows.

Reported that the most important event next week is the European Central Bank on July 25 policy meeting, European Central Bank President Draghi will hold a press conference. In addition, we should also pay attention to the initial value of US gross domestic product (GDP) in the second quarter.

China released GDP data on July 15, with an economic growth rate of 6.2 percent in the second quarter, and the performance of industry, investment and consumption far exceeded expectations in June, sending a signal that the economy as a whole is running in a stable range, the report said. with the gradual landing of early support policies, China's economy is expected to stabilize in the second half of the year.

European economic indicators are mixed. Data released by the Center for European Economic Research, a German think-tank, showed that due to tensions in Iran, German investors' confidence deteriorated more than expected in July, causing the euro to fall by more than 0.4 percent on the same day. However, the UK retail figures on the 18th far exceeded expectations, giving the pound, which has been weighed down by fears of Brexit, a respite.

Us retail sales figures were impressive, but housing market data and corporate profits were weak. Takuya Kada, an executive at a research firm, said the data sent contradictory signals about the state of the US economy, but that did not change the overall picture of downward pressure on the dollar.

There is little doubt that the Fed is expected to cut interest rates for the first time in 10 years at its policy meeting at the end of July, the report said. Now the market is concerned about the extent and number of interest rate cuts. "the Fed's rate cut is a foregone conclusion," said a foreign exchange and foreign bond strategist at Japan's SMBC Nikko Securities. But there seems to be no consensus on interest rate cuts and the direction of the US economy-not only in the markets, but also within the Fed. "

Powell, chairman of the Federal Reserve, hinted at a rate cut when he testified before Congress. In his speech on the 16th, he reiterated that he would "take appropriate action" to maintain the expansion of the US economy.

The market has been speculating whether to cut interest rates by 25 basis points or 50 basis points this time, and probability forecasts fluctuate depending on factors such as economic performance.

Reported that the protagonist of this wave of interest rate cuts is not only the Federal Reserve, but also the European Central Bank and other central banks around the world, and even the Bank of England has "eagle into dove" signs. Markets expect the ECB to ease monetary policy as early as next week. The euro has been heavy this week, while the pound has struggled to rise. Of course, the pound also faces the threat of Brexit without an agreement. The pound fell to a 27-month low of 1. 2382 against the dollar as the two candidates for Britain's next prime minister competed with each other over who would take a stronger stand on Brexit.

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The world
central banks
interest rate cuts
the economy
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