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The modest 25 basis points cut yesterday has sparked debate. While the move aligns with declining inflation, some argue that a more aggressive approach could stimulate economic growth of which I have to agree! The Reserve Bank's cautious stance raises questions about its commitment to its inflation target. With inflation now below the target range, a more decisive rate cut could have provided much-needed relief to businesses and consumers. #SARB #MonetaryPolicy #InterestRates #SouthAfrica #Economy

Market Summary: The Antipodean currencies, particularly the Australian Dollar, showed strength against the US Dollar at the beginning of the trading week, with a 0.25% gain. Despite mixed economic indicators in the US suggesting disinflation, Federal Reserve officials have not fully committed to easing cycles, keeping market expectations cautious. The focus this week will be on the release of the U.S. personal consumption expenditures (PCE) price index on Friday, which will be crucial in determining future market sentiment. There is a 70% chance of a rate cut in September, with expectations of further cuts in November. In Australia, the Reserve Bank of Australia (RBA) has refrained from cutting interest rates due to persistent inflation, which has supported the Australian Dollar against downside pressure. The RBA's reluctance to follow other central banks in the G10 in considering rate cuts is expected to continue to benefit the Aussie in the near future. The Euro remained relatively stable on Monday, with limited movement due to a sparse macroeconomic calendar. However, the Euro has been under pressure since French President Emmanuel Macron announced a snap election earlier in the month. Additionally, Germany's June IFO Business Climate survey fell below expectations, indicating a slowdown in business activity. The AUD/EUR pair lost 0.15% and traded near 0.6200. The British Pound saw a slight increase at the start of the trading week, driven by a strong risk appetite in the market. With limited economic data from the UK this week, focus has shifted to the monetary policy outlook. The upcoming election on July 4 is not causing much concern in the markets, as steady polls suggest a likely majority win for the opposition Labour Party. On Monday, the Pound ended 0.15% higher against both the Australian Dollar and the US Dollar. #australia #uk #newzealand #usa #interestrate #dollar #sterling #finance #money #forex #trading #price #business #currency #globaltrade #investment #investing #stockmarket #wealth #realestate #markets #economy #challengercapital #willbanks #marketedge #internationalbusiness #europe #ASIC #ACCC #FCA #SEC #banqeta

The South African Reserve Bank’s Monetary Policy Committee has announced a 25 basis point cut to the repo rate, lowering it from 7.75% to 7.50%. The prime lending rate will now decrease from 11.25% to 11%. This marks the third consecutive rate cut following a period of high interest rates. However, the decision was not unanimous, with four MPC members voting in favour while two preferred to keep rates unchanged. The move comes as inflation remains below the SARB’s midpoint target of 4.5% and economic sentiment improves. GDP growth projections for 2025 have been revised upwards, with expectations of reaching 2%. Analysts anticipate further rate cuts of between 25 and 50 basis points in the first half of the year, but global uncertainties, including US monetary policy, China’s economic slowdown, and geopolitical risks, may impact future decisions. Lower interest rates could provide relief for consumers and businesses, reducing borrowing costs and stimulating economic activity. However, concerns remain over inflationary pressures and external risks that could influence future policy adjustments. How do you think this rate cut will impact you? Share your thoughts in the comments. #SARB #InterestRates #SouthAfricaEconomy #CBSGroup

🇨🇳- China’s short-term sovereign bond yields on Friday dropped to levels last seen during the global financial crisis, as concerns over weak domestic demand bolstered bets that the central bank would further ease monetary policy. The yield on one-year bonds fell to 0.92 per cent, marking its lowest level since 2009, while 10-year yields dropped 0.03 percentage points to 1.74 per cent after breaching 2 per cent at the start of the month. Bond yields move inversely to prices. #China #Globalfinanicalcrisis #bonds

The SARB just slashed the repo rate for the first time in eight meetings! 📉💼 What does this mean for the rand and inflation? Find out now! 🌍💸 #SARB #RepoRate #Inflation #SouthAfrica #Economy #Finance

The global interest rate cycle has entered its next phase. This week the ECB and the BoC cut rates, following cuts by the SNB and the Riksbank earlier this year. It is time to manage liquidity to be best positioned for a lower-rate environment.

Where Angels fear to tread, Knot and his colleagues are preparing to lower interest rates at the ECB’s next meeting in seven weeks, though many are cautious about moves beyond that in the wake of Iran’s attack on Israel at the weekend. Finland’s Olli Rehn, speaking later Thursday, again drew attention to geopolitical perils. Klaas Knot the imperial hawk of the ECB on inflation and monetary policy, gives his green light for further easing of ECB’s interest rates. He officially declared that the exchange rate of the € against the dollar is not of his concern, by declaring that the EU is not the 13th district of the Fed. Wauw let that sink in. High noon as far as Knot is concerned: “Obviously monetary policy always takes place in a global context,” Knot said. “But at the same time, we are not the 13th Federal District. We have our own monetary policy. We have our own set of outlooks.” Now we know Klaas had his misfortune as far as inflation is concerned. Was not he the one who solemnly declared inflation after the Covid, as transitory? And is not he also a great fan of Draghi🥰and the #EU_bonds. One has to tread carefully because Klaas is a sensitive central banker and has long toes. But now with budget deficits rising in the Southern part of the monetary union, times are changing. Yes sir. #klaasknot #ecb #dnb #whereangels_fear_to_tread #eubonds #draghi

🗳️💶 The Impact of the ECB Lowering Rates and EU Election Concerns on the EUR With the recent decision by the European Central Bank (ECB) to lower interest rates, we're seeing a noticeable weakening of the EUR. This move aims to stimulate the economy, but it also means that the EUR has lost some of its strength against other currencies, including the GBP. Adding to the mix are the recent elections across the EU, including in key countries like France. Political uncertainties and shifts in leadership always bring a degree of market anxiety, which can further impact currency stability. Lower interest rates generally mean cheaper borrowing costs, but they can also lead to a weaker currency as investors seek higher returns elsewhere. Combined with the political uncertainties from the elections, it's no surprise that the EUR is under pressure. For those of us dealing in GBP/EUR, it’s a crucial time to stay informed and consider the implications for our financial strategies. How are you navigating these changes? Share your thoughts and let's discuss! #CurrencyExchange #GBPEUR #ECBRates #EUElections #FinancialPlanning #Forex #MarketTrends

SARB’s latest Monetary Policy Review casts doubt on near-term cut in repo rate. The South African Reserve Bank (SARB) has signalled that the repo rate will remain at its 14-year high of 8.25% for most of this year, if not longer. The SARB’s six-monthly Monetary Policy Review (MPR), published on Tuesday, casts doubt on whether headline inflation will, this year, move below 5% and closer towards the 4.5% midpoint of the bank’s target range of 3% to 6%. Get insights on the key drivers of inflation in the full article: https://buff.ly/44mN7Gc Share, like, and subscribe to our weekly newsletters! #coreinflation #headlineinflation #interestrates #MonetaryPolicyCommittee #MonetaryPolicyReview #reporate #SouthAfricanReserveBank #moonstoneinfo #moonstoneupdate #industrynews

#SUERFpolicybrief "Real interest rates and the ECB's monetary policy stance" by Marco Bernardini, Lara D'Arrigo, Alessandro Lin, and Andrea Tiseno | Banca d'Italia In our recent work (Bernardini, D’Arrigo, Lin and Tiseno, 2024) we present a new market-based measure of the short-term real #interestrate in the #euroarea. Simple metrics based on the difference between 1-year overnight index swap (OIS) and inflation-linked swap (ILS) rates suffer from a timing mismatch arising from the lagged indexation of ILS. The proposed approach addresses this issue by replacing the latter with inflation fixing swaps (IFS), contracts linked to each of the next 24 releases of euro area #inflation, and yields a more accurate and reliable measure of the ex-ante short-term real interest rate as well of its expected evolution. We use our new market-based measure to provide a comprehensive analysis of the ECB’s #monetarypolicy stance during the post-pandemic era and to identify its “neutrality date”: the point in time at which the monetary policy stance is expected to become neutral according to financial markets. #realinterestrates #naturalrate #inflationexpectations 📄https://lnkd.in/dHbf_uZr