Central Banks

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The Reserve Bank of New Zealand raised its Official Cash Rate from 0.25% to 0.5% as expected. Despite the persistent Delta variant outbreak expectations cost pressures are becoming more persistent. The move follows Mexico and Brazil Raising Rates.

The Reserve Bank of Australia left interest rates unchanged in October at a historic low of .10%. To continue to purchase government securities at the rate of $4 billion a week until at least mid-February 2022.

The Mexican Central Bank, Banco de México raised interest rates by 25 basis points to 4.75% with the bank saying headline and core inflation forecasts were revised upwards. Last week the Banco Central do Brasil​ hiked its benchmark interest rate by 100bp to 6.25%

The Bank of England MPC at it's September meeting voted unanimously to maintain Bank Rate at 0.1%. The Committee voted unanimously to maintain corporate bond purchases at £20 billion and government bond purchases at £875. Uncertainty around labour market outlook has increased

The Swiss National Bank kept negative interest rates unchanged at -0.75% for sight deposits in September. The SNB made no key changes in their language as they continue to keep negative rates and reiterated that the Swiss franc remains "highly valued".

Banco Central do Brasil​ hiked its benchmark interest rate by 100bp to 6.25% widening the Brazilian Real spread to the US Dollar. The Brazilian central bank said the underlying inflation is above the range compatible with meeting the inflation target. Earlier in the day the US Federal Reserve left rates unchanged.

The Federal Reserve kept rates unchanged at their September meeting, kept QE infinity open with TALF for open-ended Treasuries, MBS and corporate bonds in amounts needed. Inflation has risen, largely reflecting transitory factors. Inflation is elevated, largely reflecting transitory factors

The Bank of Japan announced no change to monetary policy as widely expected. The BOJ short-term interest target kept at -0.1% and the 10 year JGB yield target remains around 0%. Released details of scheme for combating climate change and made decision on yield curve control

What a great game Central Bankers play. Federal Reserve Presidents Kaplan and Rosengren said they will sell individual stock holdings after the press questioned their ethics. This comes at a time of taper concerns and market top calls.

ECB left rates unchanged as expected in September. The bank left deposit facility interest rates at -.50% and held steady rates on the main refinancing operations and on the marginal lending facility unchanged. ECB judges that favourable financing conditions can be maintained with a moderately lower pace of PEPP purchases

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