Canadian Dollar Eases After Inflation Data

Canadian Dollar Eases After Inflation Data The Canadian dollar retreated from its early highs against its major counterparts in the European session on Friday, after data showed that the nation's consumer price inflation rose in line with forecasts in August.
Data from Statistics Canada showed that inflation rose a seasonally adjusted 0.2 percent on month in August.
The reading was unchanged from last month and matched economists' expectations.
Core inflation slowed to 0.1 percent from 0.2 percent in seasonally adjusted terms.
Separate data showed that retail sales rose more than expected in July, led by higher sales at motor vehicle and parts dealers and food and beverage stores.
On month, retail sales increased 0.4 percent to C$49.1?billion in July.
This follows a 0.1 percent uptick in June and exceeded expectations for a 0.2 percent gain.
Core retail sales grew 0.2 percent on a monthly basis, compared to a 0.4 percent growth last month. Economists had foreca..

Canadian Dollar Eases After Inflation Data

canadian dollar eases after inflation data

The Canadian dollar retreated from its early highs against its major counterparts in the European session on Friday, after data showed that the nation's consumer price inflation rose in line with forecasts in August.

Data from Statistics Canada showed that inflation rose a seasonally adjusted 0.2 percent on month in August.

The reading was unchanged from last month and matched economists' expectations.

Core inflation slowed to 0.1 percent from 0.2 percent in seasonally adjusted terms.

Separate data showed that retail sales rose more than expected in July, led by higher sales at motor vehicle and parts dealers and food and beverage stores.

On month, retail sales increased 0.4 percent to C$49.1?billion in July.

This follows a 0.1 percent uptick in June and exceeded expectations for a 0.2 percent gain.

Core retail sales grew 0.2 percent on a monthly basis, compared to a 0.4 percent growth last month. Economists had forecast the sales to improve 0.4 percent.

Oil prices fell as a meeting between OPEC and non-OPEC nations kicked off in Vienna, where they discuss compliance with ongoing production curbs to contain the global oil glut.

The ministers would discuss about the possible extension of 1.8 million barrels per day of supply cuts, which is set to expire in March 2018.

Crude for November delivery dropped $0.14 to $50.41 per barrel.

The loonie showed mixed performance in the Asian session. While the currency rose against the aussie and the greenback, it fell against the yen and the euro.

The loonie retreated to 90.96 against the yen, from a 4-day high of 91.45 hit at 8:15 am ET. This may be compared to a 2-day low of 90.67 hit in the Asian session. If the loonie extends decline, 80.00 is possibly seen as its next support level.

The loonie reversed from an early 2-day high of 1.2253 against the greenback, falling back to 1.2317. Continuation of the loonie's downtrend may see it challenging support around the 1.25 region.

The loonie hovered at a 2-day low of 1.4743 against the euro, after having advanced to 1.4659 at 8:15 am ET. The next possible support for the loonie is seen around the 1.48 area.

Flash data from IHS Markit showed that the eurozone private sector ended the third quarter on a strong note in September, with growth in activity picking up to its highest since May.

The headline composite output index rose unexpectedly to 56.7 in September from 55.7 in August. The expected score was 55.6.

The loonie fell to 0.9816 against the aussie, off its early 4-day high of 0.9750. If the loonie extends decline, 0.99 is possibly seen as its next support level.

Looking ahead, Markit's U.S. manufacturing PMI for September is due shortly.

At 9:15 am ET, ECB Vice President Vitor Constancio is chairing panel "Macroprudential policy beyond banking" at the 2nd ESRB annual conference in Frankfurt, Germany.

Federal Reserve Bank of Kansas City President Esther George gives opening keynote before the Federal Reserve Banks of Kansas City and Dallas Energy Conference: "Global Oil Supply & Demand: Prospects for Greater Balance at 9:30 am ET.

Federal Reserve Bank of Dallas President Robert Kaplan participates in moderated Q&A session before the Federal Reserve Banks of Kansas City and Dallas Energy Conference: "Global Oil Supply & Demand: Prospects for Greater Balance" at 1:30 pm ET.

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Canadian Dollar Eases After Inflation Data

Canadian Dollar Eases After Inflation Data The Canadian dollar retreated from its early highs against its major counterparts in the European session on Friday, after data showed that the nation's consumer price inflation rose in line with forecasts in August.
Data from Statistics Canada showed that inflation rose a seasonally adjusted 0.2 percent on month in August.
The reading was unchanged from last month and matched economists' expectations.
Core inflation slowed to 0.1 percent from 0.2 percent in seasonally adjusted terms.
Separate data showed that retail sales rose more than expected in July, led by higher sales at motor vehicle and parts dealers and food and beverage stores.
On month, retail sales increased 0.4 percent to C$49.1?billion in July.
This follows a 0.1 percent uptick in June and exceeded expectations for a 0.2 percent gain.
Core retail sales grew 0.2 percent on a monthly basis, compared to a 0.4 percent growth last month. Economists had foreca..

Canadian Dollar Eases After Inflation Data

canadian dollar eases after inflation data

The Canadian dollar retreated from its early highs against its major counterparts in the European session on Friday, after data showed that the nation's consumer price inflation rose in line with forecasts in August.

Data from Statistics Canada showed that inflation rose a seasonally adjusted 0.2 percent on month in August.

The reading was unchanged from last month and matched economists' expectations.

Core inflation slowed to 0.1 percent from 0.2 percent in seasonally adjusted terms.

Separate data showed that retail sales rose more than expected in July, led by higher sales at motor vehicle and parts dealers and food and beverage stores.

On month, retail sales increased 0.4 percent to C$49.1?billion in July.

This follows a 0.1 percent uptick in June and exceeded expectations for a 0.2 percent gain.

Core retail sales grew 0.2 percent on a monthly basis, compared to a 0.4 percent growth last month. Economists had forecast the sales to improve 0.4 percent.

Oil prices fell as a meeting between OPEC and non-OPEC nations kicked off in Vienna, where they discuss compliance with ongoing production curbs to contain the global oil glut.

The ministers would discuss about the possible extension of 1.8 million barrels per day of supply cuts, which is set to expire in March 2018.

Crude for November delivery dropped $0.14 to $50.41 per barrel.

The loonie showed mixed performance in the Asian session. While the currency rose against the aussie and the greenback, it fell against the yen and the euro.

The loonie retreated to 90.96 against the yen, from a 4-day high of 91.45 hit at 8:15 am ET. This may be compared to a 2-day low of 90.67 hit in the Asian session. If the loonie extends decline, 80.00 is possibly seen as its next support level.

The loonie reversed from an early 2-day high of 1.2253 against the greenback, falling back to 1.2317. Continuation of the loonie's downtrend may see it challenging support around the 1.25 region.

The loonie hovered at a 2-day low of 1.4743 against the euro, after having advanced to 1.4659 at 8:15 am ET. The next possible support for the loonie is seen around the 1.48 area.

Flash data from IHS Markit showed that the eurozone private sector ended the third quarter on a strong note in September, with growth in activity picking up to its highest since May.

The headline composite output index rose unexpectedly to 56.7 in September from 55.7 in August. The expected score was 55.6.

The loonie fell to 0.9816 against the aussie, off its early 4-day high of 0.9750. If the loonie extends decline, 0.99 is possibly seen as its next support level.

Looking ahead, Markit's U.S. manufacturing PMI for September is due shortly.

At 9:15 am ET, ECB Vice President Vitor Constancio is chairing panel "Macroprudential policy beyond banking" at the 2nd ESRB annual conference in Frankfurt, Germany.

Federal Reserve Bank of Kansas City President Esther George gives opening keynote before the Federal Reserve Banks of Kansas City and Dallas Energy Conference: "Global Oil Supply & Demand: Prospects for Greater Balance at 9:30 am ET.

Federal Reserve Bank of Dallas President Robert Kaplan participates in moderated Q&A session before the Federal Reserve Banks of Kansas City and Dallas Energy Conference: "Global Oil Supply & Demand: Prospects for Greater Balance" at 1:30 pm ET.

source

Russia CB Likely To Cut Rates Further On Lower Inflation Expectations

Russia CB Likely To Cut Rates Further On Lower Inflation Expectations Russia's central bank is likely to cut interest rates in the near future amid lower inflation expectations as the economy is facing the large amount of spare capacity, William Jackson, an economist at Capital Economics, said.
The Board of Directors decided to cut the key rate by 50 basis points to 8.50 percent, the Bank of Russia said in a statement on September 15.
This followed a temporary pause in the easing cycle in July, after 100 basis points of rate cuts in the first half of the year.
Bank of Russia Governor Elvira Nabiullina, however, struck a predictably cautious tone at post-meeting press conference, the economist observed.
The recent rate cut was clearly motivated by August's CPI data, with the annual inflation falling to a post-communist low of 3.3 percent, well below the central bank's 4.0 percent target.
The cautious tone of the accompanying statement stressed that the risks o..

Russia CB Likely To Cut Rates Further On Lower Inflation Expectations

russia cb likely to cut rates further on lower inflation expectations

Russia's central bank is likely to cut interest rates in the near future amid lower inflation expectations as the economy is facing the large amount of spare capacity, William Jackson, an economist at Capital Economics, said.

The Board of Directors decided to cut the key rate by 50 basis points to 8.50 percent, the Bank of Russia said in a statement on September 15.

This followed a temporary pause in the easing cycle in July, after 100 basis points of rate cuts in the first half of the year.

Bank of Russia Governor Elvira Nabiullina, however, struck a predictably cautious tone at post-meeting press conference, the economist observed.

The recent rate cut was clearly motivated by August's CPI data, with the annual inflation falling to a post-communist low of 3.3 percent, well below the central bank's 4.0 percent target.

The cautious tone of the accompanying statement stressed that the risks of inflation overshooting the Bank's target "dominate" the risks of it overshooting target.

The bank also raised concerns about capacity constraints – not just labor shortages, but also in production capacity.

Meanwhile, Nabiullina repeatedly mentioned that inflation expectations were not yet anchored at target.

The Board merely "deems it possible" to cut interest rates again over the next couple of quarters and Nabiullina said she saw the key rate at 6.5-7.0 percent in 2019.

Capital Economics continue to think the Russian economy is operating with a sizable output gap that should help to ease price pressures, even as the economy recovers.

The firm expects headline inflation to stay below the bank's target over the forecast horizon.

"If we're right that inflation will stay below target, that's likely to prompt the Bank's Board to lower interest rates by more than they are currently suggesting is probable," Jackson predicted.

Finally, Nabiullina stated that the inflation target is no longer 4.0 percent by the end of 2017, but rather close to 4.0 percent, although she said it was premature to talk about introducing a specific target range.

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Canadian inflation and retail sales data coming up next

Canada August CPI due next Canadian headline inflation is expected to climb 0.2% m/m and 1.5% y/y in numbers released at the bottom of the hour. That's a pickup from a flat monthly reading a 1.2% y/y rise in July.

Canada August CPI due next Canadian headline inflation is expected to climb 0.2% m/m and 1.5% y/y in numbers released at the bottom of the hour. That's a pickup from a flat monthly reading a 1.2% y/y rise in July.

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Hungary Inflation Likely To Exceed Central Bank's Projection: Capital Economics

Hungary Inflation Likely To Exceed Central Bank's Projection: Capital Economics Mounting capacity constraints and rapid wage growth in Hungary suggest that the headline inflation will turn out to be much stronger next year than the central bank expects, Liam Carson, an economist at Capital Economics, said following the central bank's interest rate announcement this week.
The Magyar Nemzeti Bank cut the overnight central bank deposit rate by 10 basis points to -0.15 percent on September 19. The rate was cut to negative last year.
The lending rate was kept unchanged at 0.90 percent. Nonetheless, this plays a much smaller role in determining overall role in determining overall monetary conditions than the deposit rate, the economist noted.
Carson observed that the decision by the central bank to ease monetary conditions further looks like a policy misstep and unless policy makers reverse course soon, they will find themselves facing a more severe inflation problem furt..

Hungary Inflation Likely To Exceed Central Bank's Projection: Capital Economics

hungary inflation likely to exceed central bank's projection: capital economics

Mounting capacity constraints and rapid wage growth in Hungary suggest that the headline inflation will turn out to be much stronger next year than the central bank expects, Liam Carson, an economist at Capital Economics, said following the central bank's interest rate announcement this week.

The Magyar Nemzeti Bank cut the overnight central bank deposit rate by 10 basis points to -0.15 percent on September 19. The rate was cut to negative last year.

The lending rate was kept unchanged at 0.90 percent. Nonetheless, this plays a much smaller role in determining overall role in determining overall monetary conditions than the deposit rate, the economist noted.

Carson observed that the decision by the central bank to ease monetary conditions further looks like a policy misstep and unless policy makers reverse course soon, they will find themselves facing a more severe inflation problem further down the road.

The accompanying press statement revealed a further easing measure that the cap on three-month deposits will be lowered further, from HUF 300 billion by end-September to HUF 75 billion by end-December – a larger reduction than had been anticipated.

"These moves are likely to push down interbank rates further," the economist noted.

Further, the bank said that the year-end upper limit on the stock of deposits would remain at EUR 75 billion and suggested that it may adjust its swap instruments with which to provide forint liquidity to commercial banks.

The central bank also lowered its inflation projections from 2.8 percent in 2018 and 3.0 percent in 2019 to 2.5 percent and 2.9 percent, respectively.

Capital Economics pointed out that the latest forecasts fail to take account of the economy's mounting capacity constraints and rapid wage growth.

Wages in the private sector are expanding at 13.5 percent annually, which was the sharpest pace in over a decade.

This is likely to feed into a marked rise in consumer price pressures over the coming quarters and the firm's inflation forecast of 3.8 percent for 2018 sits well above that of the central bank, Carson said.

"We're increasingly concerned that policymakers will continue to underestimate inflation risks," the economist said.

"If the MPC fails to reverse course soon, we could see a severe deterioration in the inflation outlook, prompting more aggressive rate hikes down the line."

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Ex-BOJ’s Kiuchi says 2% inflation target is not appropriate

Ex-BOJ board member Kiuchi speaking in Tokyo 22 Sept – JGB bubble is side effect of BOJ easing – it's impossible for BOJ to exit easing with no damage – BOJ may target shorter-term yield, shift from 10-yr

Ex-BOJ board member Kiuchi speaking in Tokyo 22 Sept – JGB bubble is side effect of BOJ easing – it's impossible for BOJ to exit easing with no damage – BOJ may target shorter-term yield, shift from 10-yr

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BRAZIL: Inflation Expectation By Year-end Cut To 3.2% – Central Bank

BRAZIL: Inflation Expectation By Year-end Cut To 3.2% – Central Bank The Brazilian central bank's Quarterly Inflation Report presents revised projections for inflation decelerating in 2017 and 2018, suggesting that the monetary authority still has room to lower interest rates.
In the central bank's reference scenario, which considers the interest rate projection of the Focus survey and a constant exchange rate of R$ 3.10 over the entire forecast horizon, the projection for annual inflation fell from 3.8% in the previous quarterly report to 3.2%. For 2018, the estimate was cut to 4.1%, from 4.3%, on the same basis of comparison. According to the report, inflation will decrease to 3.9% by the end of 2019 and remain at that level through 2020.
In the market scenario, which considers the interest rate and foreign exchange projections in the Focus survey, inflation projections also fell from 3.8% to 3.2% by the end of 2017 and from 4.5% to 4.3% by the end of 2018.
Inflat..

BRAZIL: Inflation Expectation By Year-end Cut To 3.2% – Central Bank

brazil: inflation expectation by year-end cut to 3.2% - central bank

The Brazilian central bank's Quarterly Inflation Report presents revised projections for inflation decelerating in 2017 and 2018, suggesting that the monetary authority still has room to lower interest rates.

In the central bank's reference scenario, which considers the interest rate projection of the Focus survey and a constant exchange rate of R$ 3.10 over the entire forecast horizon, the projection for annual inflation fell from 3.8% in the previous quarterly report to 3.2%. For 2018, the estimate was cut to 4.1%, from 4.3%, on the same basis of comparison. According to the report, inflation will decrease to 3.9% by the end of 2019 and remain at that level through 2020.

In the market scenario, which considers the interest rate and foreign exchange projections in the Focus survey, inflation projections also fell from 3.8% to 3.2% by the end of 2017 and from 4.5% to 4.3% by the end of 2018.

Inflation continues at that level for the second quarter of 2019, when it should fall to 4.2%, remaining at that level until the first quarter of 2020, when it should fall to 4.1% and end that year at that level.

Meanwhile, the central bank's projection for administered prices this year rose to 7.4%, from 5.9% in the previous report, while for 2018 it fell to 5.2%, from 5.5%. For 2019 and 2020, the Brazilian central bank expects the increases in administered prices to reach 4.3% and 4.2%, respectively.

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ECB Says Improved Growth Momentum Yet To Translate Into Stronger Inflation

ECB Says Improved Growth Momentum Yet To Translate Into Stronger Inflation Eurozone's improved economic growth momentum has yet to feed into inflation, making it necessary to maintain the massive monetary stimulus until price pressures build up, European Central Bank said in its latest economic bulletin released on Thursday.
“While the ongoing economic expansion provides confidence that inflation will gradually head to levels in line with its inflation aim, it has yet to translate sufficiently into stronger inflation dynamics,” the ECB said in the bulletin, echoing the assessment made in the introductory statement after the September 7 policy session.
The ongoing economic expansion remains solid and broad-based, but underlying inflation is yet subdued, the bank said. Further, the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring with regard to its possible implications for the medium-term outlook for price stability, the ..

ECB Says Improved Growth Momentum Yet To Translate Into Stronger Inflation

ecb says improved growth momentum yet to translate into stronger inflation

Eurozone's improved economic growth momentum has yet to feed into inflation, making it necessary to maintain the massive monetary stimulus until price pressures build up, European Central Bank said in its latest economic bulletin released on Thursday.

"While the ongoing economic expansion provides confidence that inflation will gradually head to levels in line with its inflation aim, it has yet to translate sufficiently into stronger inflation dynamics," the ECB said in the bulletin, echoing the assessment made in the introductory statement after the September 7 policy session.

The ongoing economic expansion remains solid and broad-based, but underlying inflation is yet subdued, the bank said. Further, the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring with regard to its possible implications for the medium-term outlook for price stability, the bank added.

"A very substantial degree of monetary accommodation is still needed for underlying inflation pressures to gradually build up and support headline inflation," the ECB reiterated.

The bank also said that the Governing Council "will decide in the autumn on the calibration of the policy instruments beyond the end of the year."

The ECB also noted that the swift decline in euro area unemployment was particularly encouraging against a background of increasing labour supply.

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Latvia PPI Inflation Eases In August

Latvia PPI Inflation Eases In August Latvia's producer price inflation moderated in August, figures from the Central Statistical Bureau showed Thursday.
Industrial producer prices climbed 3.3 percent year-over-year in August, slower than the 3.6 percent increase in July. The measure has been rising since February.
Both domestic and foreign market prices grew the same 3.3 percent annually in August.
On a monthly basis, producer prices edged up 0.1 percent from July, when it rose by 0.4 percent.

Latvia PPI Inflation Eases In August

latvia ppi inflation eases in august

Latvia's producer price inflation moderated in August, figures from the Central Statistical Bureau showed Thursday.

Industrial producer prices climbed 3.3 percent year-over-year in August, slower than the 3.6 percent increase in July. The measure has been rising since February.

Both domestic and foreign market prices grew the same 3.3 percent annually in August.

On a monthly basis, producer prices edged up 0.1 percent from July, when it rose by 0.4 percent.

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