The Bank of Japan announced overnight that it plans to purchase 300 billion yen of ETF’s annually that contain stocks issued by firms investing in CAPEX and human resources. Alongside this, the BoJ decided extend the average duration of Japanese Government Bond purchases to 7-12 years, from 7-10, as of next year.
We now see another new low for crude oil as the U.S. dollar rallies after the Fed raises rates, and worries about the massive global oil glut drive the market into dangerous levels. While most people like low energy prices, the recent move lower is causing long-term damage to our energy future.
The classical accommodative FOMC market response is in evidence once again. There is the friendly anticipation; the jitters on the statement tea leaf reading; the bullish response to the Chair providing the proper ‘spin’ at the press conference; and then the markets get back to reality.
If December was a “live possibility” for a rate hike prior to the October jobs report, then today’s numbers may have just sealed the deal, after a staggering 271,000 jobs were added in the month and unemployment fell to 5%, the level that the Fed deems to be full employment. Ever since the October meeting, today’s jobs report was seen as one of two that could make or break the decision and based on the data, the decision suddenly looks pretty straight forward.
Fed Chair Janet Yellen piled onto the crude oil market after telling Congress that a December rate hike was a, "Live possibility!" Live--it’s a December rate hike! Maybe Yellen instead of Donald Trump should be on Saturday Night Live because she seems to get a major reaction to saying "live"!
China's central bank cut interest rates for the sixth time since November on Friday, and it again lowered the amount of cash that banks must hold as reserves in another attempt to jumpstart a slowing economy.
A U.S. interest rate hike is still probably coming in October or December despite some conflicting economic signals, a top Federal Reserve official said on Friday, reinforcing the central bank's message over the last few weeks.
Global investors pulled an estimated $40 billion from emerging market assets in the third quarter, according to data from the Institute of International Finance, making it the worst quarter since the end of 2008.