Interest Rate Decisions And Chinese Stimulus Package In Spotlight

<p><a href=""><picture class="lozad" data-iesrc="" data- data- data-alt="usd index chart january with blog title" data-height="376" data-width="800"><source type="image/webp" media="(min-width: 640px)" srcset=",webp/"></source><source type="image/webp" media="(max-width: 639px)" srcset=",webp/"></source></picture></a></p><p>Major central bank interest rate decisions are back on the agenda this week. On Tuesday morning, the Bank of Japan (BoJ) kept its borrowing costs on hold as it was anticipated. Following the BoJ and the People’s Bank of China (PBoC), which kept its policy unchanged on Monday, the Bank of Canada is scheduled to announce monetary policy updates on Wednesday.</p><p>According to a report by Bloomberg, Chinese authorities are <a rel="nofollow noopener" href="" target="_blank">ready to utilise a stimulus package of about $278 billion</a> to support its struggling stock markets. Chinese Premier Li Qiang said yesterday that “we must take more powerful and effective measures to stabilize the market and confidence.”</p><p>The Hang Seng index rose by 3% on Tuesday on the back of the stimulus package news. It should be noted that the Hong Kong index lost almost 14% of its value in 2023, becoming the worst performing index in the region.</p><div>
<h2>Table of Contents</h2>
<li><a href="">Bank of Japan Interest Rate Decision</a></li>
<li><a href="">New Zealand CPI Q4 2023 Report</a></li>
<li><a href="">Bank of Canada Interest Rate Decision</a></li>
<li><a href="">People’s Bank of China Interest Rate Decision</a></li>
</div><h2>Bank of Japan Interest Rate Decision</h2><p>Earlier in the morning, the BoJ governing board announced that it would keep interest rates unchanged as well as its yield curve control policy as it was expected. The BoJ’s policymakers lowered their median growth forecast for core consumer price growth to 2.4% for fiscal 2024 from 2.8% forecast in October.</p><p>BoJ Governor Kazuo Ueda stressed that the central bank would not hesitate to take additional easing measures if necessary. Some economists suggest that the BoJ could abolish its negative rates policy no earlier than April as it expected to see whether there would be a substantial wage increase as a result of the upcoming wage negotiations.</p><h2>New Zealand CPI Q4 2023 Report</h2><p>Statistics New Zealand will release its Q4 2023 CPI inflation report later in the evening. According to analysts’ forecasts, CPI inflation is expected to come in at 4.7% on a year-to-year basis, recording a significant drop from 5.6% in the third quarter of the year.</p><p>The New Zealand Institute of Economic Research (NZIER) report published on January 16th, showed a net 10% of firms expect the economy will deteriorate in the next six months, down from 49% in the third quarter.</p><p><a rel="nofollow noopener" href="" target="_blank">Economists at ANZ Bank New Zealand said</a> in a note: “The economy unexpectedly got some wind in its sails going into the end of 2023. The RBNZ will be pleased to see the decline in direct inflation indicators, but wary of the forward-looking indicators that suggest a risk that the economy may be getting a second wind before the inflation-fighting job is done.”</p><h2>Bank of Canada Interest Rate Decision</h2><p>In Canada, the BoC is likely to maintain its policy rate at 5%, while analysts expect the board to keep a “hawkish” tone in its post-meeting statement. Statistics Canada announced that the consumer price index rose 3.4% in December on an annualised basis, following a 3.1% increase a month earlier.</p><p>As a result of the inflation increase, market analysts pushed back rate cut forecasts from April to July as they suggested the country’s central bank could reassess its approach regarding monetary policy.</p><p><a rel="nofollow noopener" href="" target="_blank">Royal Bank of Canada analysts mentioned in a report</a> that “in terms of the actual setting of monetary policy, economic developments have been soft enough to reinforce that further interest rate hikes won’t be needed, but inflation (and wage growth) have also been too sticky to push the BoC to consider starting an easing cycle yet."</p><h2>People’s Bank of China Interest Rate Decision</h2><p>On Monday, the PBoC announced its decision to keep borrowing costs unchanged. The decision was in line with economists’ expectations. According to some economists, steady rates show the desire to ensure the existing amount of credit is used efficiently as previous efforts to increase money supply have yet to translate into a significant improvement in actual borrowing.</p><p><a rel="nofollow noopener" href="" target="_blank">Market analysts at Bloomberg Economics</a> noted that “we see the PBOC trimming rates by 10 basis points this quarter, which should lead broader lending rates down as well. Sluggish growth and increasing deflationary pressure show the economy needs stronger policy support — and quickly. An expected cut in the PBOC policy rate would give banks room to trim lending rates.”</p><h3>Trade on a Risk-Free Demo Account</h3><p>Are you interested in practising trading without risking your funds? A demo trading account from Admirals allows you to do just that, whilst trading in realistic market conditions. Click the banner below to open a demo account today:</p><p></p><div><div><span>Risk Free Demo Account</span><p>Register for a Free Online Demo Account and Master Your Trading Strategy</p><a target="_blank" href="">OPEN DEMO ACCOUNT</a></div><div><a target="_blank" href=""><a href=""><picture class="lozad" data-iesrc="" data- data- data-alt="Risk Free Demo Account" data-height="" data-width=""><source type="image/webp" media="(min-width: 640px)" srcset=",webp/"></source><source type="image/webp" media="(max-width: 639px)" srcset=",webp/"></source></picture></a></a></div></div><p><b>This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the <a href="" target="_blank" rel="noopener">risks</a>.</b></p>

Leave a Comment

Leave a Reply

Your email address will not be published. Required fields are marked *