While the Hong Kong Dollar has continued to plunge towards breaking its peg band to the US dollar, overnight saw offshore Yuan plunge back to 1-month lows despite a PBOC rate-hike, as anxiety over US trade wars ripples through markets...
In a surprising announcement, the Bank of England kept its rates as expected at 0.50%, however instead of a unanimous 9-0 vote as had been expected, the vote was 7-2 with McCafferty and Saunders dissenting.
"The Commerce ministry welcomed Wednesday’s WTO ruling against Obama-era anti-subsidy tariffs on Chinese goods. The decision "proves that the US side has violated WTO rules and repeatedly abused trade remedy measures..."
Yesterday, we showed that according to Wall Street , the biggest tail risk facing investors right now is a "trade war" and that should trade tensions escalate, lower stock prices would be the immediate result. Today, this is precisely what is happening.
"...the peoples of Europe are drifting apart...the political divide in Europe may now be hard to roll back absent a shift in focus to national priorities that pay urgent attention to the needs of those being left behind."
The PBOC once again raised the 7-Day repo rate from 2.50% to 2.55%, continuing the tradition of raising reverse repo rates in response to Fed rate hikes.
"Price action of the S&P 500 was not coherent... his was likely the result of a severe snowstorm affecting the US northeast and incomplete market participation."
Today's biggest winners? Commercial banks, who will now receive $37 billion in annualized interest, an increase of $5 billion from the last rate hike, and on track to be paid $47 billion by year end.
Jay Powell's first FOMC Meeting as Fed Chair brings a 25bps rate-hike (as expected, though there was a 24% chance of 50bps) and keeps expectations for 2 more hikes in 2018, but hiked its rate trajectory for 2019/2020 and replace "solid rate" with "moderate rate."
A 25bps hike to 1.50-1.75% is priced in with over 90% certainty by the markets. More interest is on how many hikes the FOMC projects in 2018 (three or four), and over the Fed's forecast horizon.
Beijing has decided to increase the cost of oil storage to discourage pure-play speculators from flooding in the market and unleashing price volatility that could spell doom for the brand-new contracts...
Deutsche Bank shares are down 6%, at their lowest since Nov 2016 (near post-crisis lows), after warning that euro strength and higher funding costs will weigh on revenue in the securities unit this quarter (just a week after the lender voiced optimism about the outlook for the year).
