The Reserve Bank of India cut its policy interest rate to a 4-1/2 year low of 6.75% on Tuesday, in a bigger-than-expected move that, with inflation running at record lows, could help an economy in danger of slowing down.
Gold sharply extended its gains for a second day on Thursday and more than made up the losses suffered earlier in the week. Though the metal was slightly lower at the time of this writing on Friday, it is still holding in the positive territory for the week and thus remains on course to post its second two-week rally since the second week of August.
The U.S. dollar was gaining this morning on a stronger-than-expected GDP report, rising expectations of a Fed rate hike, and easing concerns about global growth. Second quarter GDP was up 3.9%, well ahead of consensus expectations of 3.7%.
Crude oil prices edged up on Friday boosted by stronger than expected U.S. economic data though the longer-term outlook for energy markets remains weak due to a global oil supply glut and uncertainty over economic growth prospects in Asia.
Today’s insight includes a rate cut in Norway, more struggles for commodity currencies, a speech by Janet Yellen, and a meeting between the leaders of the world’s two largest economies. This is your Morning Market Report for Sept. 24, 2015.
The U.S. dollar saw gains after a critical manufacturing report in China signaled the world’s second-largest economy is slowing down. Today’s insight includes a bounce-back for oil prices, economic concerns Down Under, testimony from European Central Bank head Mario Draghi and the world’s reaction to China’s slowing economic growth.
Not raising rates took many by surprise. After all, our economy is plugging along and rates have never been held this low for so long, etc., etc. I am sure there is some sound concern regarding what is going on in China and elsewhere, as there should be, as a justification for not raising them. But is there more here than meets the eye?
The U.S. dollar approached two-week highs on Tuesday morning after Atlanta Federal Reserve Bank President Dennis Lockhart said he predicts the U.S. central bank will raise interest rates at the October or December FOMC meeting.