Central Banks

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The Bank of England (BOE) Monetary Policy Committee (MPC) left interest rates unchanged and QE on hold with a vote of 6-2 Thursday. The British pound fell 120 pips on the news.

Cleveland Fed President Loretta Mester commented on rates and inflation. These are interesting in light of the recent weak inflation numbers and the tumbling U.S. dollar, says 3 hikes a year appropriate.

The Reserve Bank has kept its cash rate on hold at a record low of 1.5%.

RBA Governor Philip Lowe said the recent increase in the Australian dollar above US80 cents was hurting job creation and economic activity.

On Tuesday the Federal Reserve's FOMC begins a two day meeting. On Wednesday at 2:00 p.m. ET there will a FOMC statement issued. The Fed is not expected to change interest rates but investors will be looking for more detail on its balance sheet and for further and inflation. 

The ECB left rates and QE on hold today and in President Draghi's ECB press conference he did his best to be dovish. Despite this the EURUSD Broke 14 month highs and the EURGBP broke highs since the Trump election. 

A double dose of Fed Chairwoman Janet Yellen this week. Wednesday, July 12 she will give her semi-annual monetary policy testimony, (formerly known as the Humphrey-Hawkins testimony) before the House Financial Services Committee.

Following a series of soft data points such as retail sales and CPI both the New York and Atlanta Federal Reserves lowered their second and third Quarter GDP estimates. This follows just two days after the FOMC raised Interest rates.

The Federal Reserve has raised interest rates by a quarter of a percent to 1.25% as had been expected by over 90 percent of the market (Fed Futures). The FOMC hikes maintained it's forecast for one more hike in 2017 and says it is 'monitoring inflation developments closely'.

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