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Hopes that Greece is set to remain in the euro area strengthened after the latest reform proposal submitted by the government was welcomed positively by several top European leaders, though Germany chose to tread cautiously. The Greek Parliament is set to discuss the proposal Friday evening and the vote outcome is expected early Saturday. Eurozone finance ministers are scheduled meet on Saturday.
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Eurozone leaders unanimously reached an agreement early Monday to start talks with Greece for a EUR 82-86 billion third bailout programme after hours of negotiations, empowering the country to battle a severe economic crisis and remain in the single currency bloc.
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The Greek parliament is preparing for another vote on the final bailout negotiations on Wednesday as Prime Minister Alexis Tsipras seeks to close the third bailout deal that will offer up to EUR 86 billion debt, after Greece repaid money due to the International Monetary Fund and the European Central Bank.
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Greece cleared another hurdle and stepped into the bailout zone after the government approved the second set of reform measures early Thursday local time, as Prime Minister Alexis Tsipras is seeking to close a deal that will offer up to EUR 86 billion debt even as the crisis struck country faces protests and violence.
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Russia's central bank cut its key interest rate for the fifth time this year, citing the prospect of significant cooling in the economy despite a moderate increase in inflation risks.
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Job growth in the U.S. slowed for the second consecutive month in July, according to a report released by the Labor Department on Friday, although the report still showed a notable increase in employment.
EURUSD M5: 90 pips range price movement by USD - Non-Farm Employment Change news event :
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India has sufficient foreign exchange reserves to intervene in the market to curb any possible volatility in the rupee, the Reserve Bank of India Governor Raghuram Rajan said Monday.
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Markets now believe Federal Reserve won't rise rates until 2016, and this is what experts are talking about:
Economists at Barclays - expectation of a Fed rate rise to the first half of next year: "Given the uncertainty around the current global outlook, the timing of the rate hike seems more uncertain than usual. Should this episode of financial market volatility prove transitory, the FOMC could raise rates in December. On the other hand, if the volatility proves durable or reveals greater than expected weakness in global activity, the FOMC may push the first rate hike beyond March."
Economists at Capital Economics - September rate hike: "There are no signs of any major downturn in the US economy, economic growth in China still appears to slowing rather than collapsing and emerging markets are not about to endure a repeat of the 1997/98 Asian crisis. The current bout of market turmoil, if it continues, might persuade the Fed to hold off on raising interest rates in September. Since that volatility doesn’t reflect any genuine economic slump, however, we wouldn’t be surprised if it proved short-lived leaving the way open for the Fed to begin raising rates at some point this year."
The International Monetary Fund (IMF) - delay raising rates until 2016: "The FOMC should defer its first increase in policy rates until there are greater signs of wage or price inflation than are currently evident. Based on staff’s macroeconomic forecast, and barring upside surprises to growth and inflation, this would imply a gradual path of policy rate increases starting in the first half of 2016."
the source
"Federal Reserve officials made clear in recent days they have not agreed on when to start raising short-term interest rates, and the possibility of a September move remains on the table. The odds of a rate increase next month have appeared to diminish amid worries about China’s economic slowdown and turmoil in financial markets. Some officials want to see more economic data before deciding, while others think they’ve waited long enough. The most powerful decision maker, Chairwoman Janet Yellen, has not commented on the topic in the past few days. Here are some key quotes from those who have."
- Fed Vice Chairman Stanley Fischer: "I will not and indeed cannot tell you what decision the Fed will reach by Sept. 17."
- New York Fed President William Dudley: "At this moment, the decision to begin the normalization process at the September [Federal Open Market Committee] meeting seems less compelling to me than it did several weeks ago."
- St. Louis Fed President James Bullard: "I’m willing to respect the volatility in markets and see how it shakes out here. But just sitting here today, I’m not seeing how this is going to change the forecast and therefore I think the contours of monetary policy are about the same today as they were a couple weeks ago."
- Cleveland Fed President Loretta Mester: "I think the economy can support a modest increase in interest rates. I want to take the time I have between now and the September meeting to evaluate all the economic information that's come in, including the recent volatility in the markets and the reasons behind that. But it hasn't so far changed my basic outlook that the U.S. economy is solid and it could support an increase in interest rates."
- Kansas City Fed President Esther George: "In my own view, the normalization process needs to begin and the economy is performing in a way that I think it is prepared to take that."
- Atlanta Fed President Dennis Lockhart: "We are sort of anxious to get going, but given the events of the last several weeks, a risk factor has arisen” …“It has to be considered an open question whether we move now or wait a little while."
- Minneapolis Fed President Narayana Kocherlakota: "It’s definitely premature to be thinking about the removal of accommodation in the form of lifting off, at least based on my current outlook for inflation."
the source
The United States pressed China to let its exchange rate be determined by market forces and refrain from competitive devaluation when G20 finance ministers and central bank chiefs from the world's top 20 economies gathered in Turkey.
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