Weekly Outlook: Oil, Natural Gas
Dear clients,
Forecasts of a warmer weather cooling down the prices on gas, as oil is slowly correcting. This time we'll be looking at these instruments and their movements.
Join us*on December 21 at 12:00 GMT.
During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.
Ways to go: ECB's highest rate in 13 years
Dear clients,
The European Central Bank raised its key rate by 50 basis points to 2.5%. This is the highest rate since January 2009. The central bank warns that aggressive rate hikes are far from over. Like the US Federal Reserve, the ECB expects to bring inflation to the level of 2%. Experts expect to see the final rate in the region of 3.5%.
Although rate hikes have slowed down, compared to previous moves of 75 basis points, President Christine Lagarde insists that investors should not read too much into that. Shorter moves are still acceptable, she said,even while acknowledging that a “shallow” economic slump is likely to have arrived.
The forecasts for inflation have also been revised, the target value of 2% is expected only by 2025. In particular, the scenario of a "relatively short" recession is being considered.
The surprise effect. How the Bank of Japan blindsided the markets
Dear clients,
The Bank of Japan shocked markets after it unexpectedly revised its yield curve control policy, signaling that the last stronghold of minimum interest rates among developed countries is gradually moving towards policy normalization.
Japanese government and treasury bonds tumbled while the yen soared after the BOJ raised its benchmark yield cap to around 0.5% from 0.25%. Such a move surprised almost all analysts who did not count on any revisions, at least until the change in the bank's management.
The sudden decision could have a noticeable ripple effect in global financial markets, as the BOJ's unwavering commitment to protecting its 10-year yield cap has acted as an anchor, indirectly helping to keep borrowing costs low around the world. However, some analysts believe that this move is primarily aimed at improving the functioning of the bond market, rather than tightening monetary policy.
According to experts, the surprise effect is the Bank of Japan's signature move to achieve its strategic goals. So far, the biggest shock from the central bank in recent times was the decision in October 2014 to expand the easing program.
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