Governor Williams ‘has room to cut interest rates’
1) Dollar-Won rises 20 won in one week
On Friday night, the dollar-won (REGN) exchange rate closed at 1,471 won, down about 1 won from the previous day. Foreign investors net-sold the KOSPI by 2.8 trillion won, heading for the 1,480 won range, which is expected to be a strategic currency hedging for the national pension, but the exchange rate fell slightly in the latter half of the market. Korean won traders also watch for the yen’s highly correlated movements. ING raised the possibility of up to 100 billion dollars flowing into the market, saying the Japanese authorities are nearing the point of intervention, while Credit Agricole expects the Takaiichi government to intervene more actively in the foreign exchange market
2) Governor Williams ‘has room to cut interest rates’
New York Fed President John Williams said there was room for further cuts in interest rates in the near future as the labor market weakened. “Monetary policy remains somewhat constrained,” he said. “We believe that further adjustments to the target range of the federal funds rate are still possible in the near future, which will allow us to move the policy stance closer to the neutral range and maintain a balance between achieving our double responsibilities.” He reckons downside risks to employment have increased as the labor market cools, while upside risks to inflation have eased somewhat
3) Discord in Fed Deepens
As the Fed’s disagreement intensifies ahead of the December FOMC meeting, market experts are already predicting a vote battle. Given recent Fed remarks, the FOMC is now almost tightly divided. As monetary authorities are agonizing over weakening labor markets and continuing high prices, the FOMC failed to reach a unanimous agreement in June, and the discussion became more complicated as the federal shutdown delayed the release of key economic indicators
4) Deny peace in Ukraine
Ukraine, as well as major European allies, have rejected key points of the peace plan led by the United States and Russia. The U.S. has reportedly threatened to suspend military aid if Ukraine does not accept the mediation. According to the draft peace plan confirmed by Bloomberg, Ukraine must effectively give up the Crimean Peninsula, Luhansk and Donetsk regions to Russian territory, give up NATO membership and drastically reduce the size of its military. Ukraine and major European countries reportedly conveyed their position that territorial issues should be discussed after the current ceasefire on the front lines
5) The U.S. October CPI report doesn’t even come out
The U.S. Bureau of Labor Statistics (BLS) said it will not be able to release its consumer price index (CPI) report for October. The CPI report for November was released on December 18. Earlier, BLS canceled the release of its employment report for October due to data collection disruptions. CPI is a key indicator of the inflation rate in the U.S. and affects the wage, pension, and welfare levels of more than 100 million Americans. CPI is primarily prepared by visiting retailers and service providers across the U.S. to examine the prices of thousands of items
(자료: Bloomberg News)