As expected, the federation introduced the ‘Hawkish shift’. Inflation is no longer considered a transition. It currently sits on higher levels. The federation remained unchanged at 0-0.25%, but as inflation continued for a period of more than 2% and the labor market improved for a while, it was appropriate to reduce the acquisition of Omicron and other disparities as soon as possible. Accident. Starting in January, the federation will buy at least $ 40 bln p / m and mortgage repayments at $ 20 bln p / m. Net purchase expires in March. Priority inflation has had a major impact on December estimates. PCE inflation for this and next year has improved to 5.3% (4.2%) and 2.6% (2.2%), respectively. Unemployment rate of 2022-2024 is 3.5%, below long-term equity. Paul reiterated in a press release that the federation was looking at a wide range of job market applicants. However, the current and projected improvement is that the buyers conclude that there will be 3 tariff increases next year and further increases in 2023 and 2 in 2024. According to Paul, a net asset can be lifted after the purchase. The federation has discussed the accounts, but no decisions have been made. Initially, US production rose to 5 bps, but the move was reversed during the press conference. At the end of the day, US production rose between 0.63 bps (2-y) and 3.2bps (30-y). Inflation was greater than the fall in real goods. Therefore, the markets do not see the Fed’s change as an overstatement at this stage. This was the conclusion of FX and for fair investors. US stocks rose between 1.08% (Dow) and 2.15% (Nasdaq). The DXY index reversed its day-on-day profit to close slightly to 96.51. EUR / USD tested near 1.1225, but closed below 1.129.
A number of central banks, including ECB, BOE, Swiss National Bank, Norges and the Central Bank of Turkey (CBRT), all decided on monetary policy during yesterday’s meeting of the federation. CBRT is expected to further reduce interest rates. See SNB Review for SNB Markets on the recent strength of CHF. Norges Bank may gradually become normal (+ 0.25%). The main course is served by the Bank of England and the ECB. The labor market, which wants to be sure of the working conditions after the termination of the labor market, refrained from raising the canal in November. Labor reports were strong and inflation exceeded 5.0% ahead of expectations. If the BoE wants to maintain its credibility and consistency, now is the time to at least take some concrete action and increase its policy rate to 0.25%. In an internal political debate, the ECB’s mission is even more complex and complex. Even inflation forecasts are even more controversial. The 2022 forecast is well above 2.0%, but a return below the target of 2023 and 2024 will open the debate on a regular basis. In any case, the ECB has little time to prepare for the post-PEPP acquisition framework. A short-term review with a flexible, low APP (e.g. quarterly) seems to be the best way to deal with rising inflation. However, the ECB will continue to face claims throughout the EMU to ease the situation. There is a need to convince markets that inflation is a priority. This will also be key to stopping the erosion of the single currency.
The Australian labor market was under intense pressure in November. Employment record broke 366.1k, down 56k in October. Consensus estimates were more modest around 200 k. However, the change was not due to new jobs. Instead, many workers who were not employed during extended locks have returned to work after the copyright restrictions were lifted. This increased the participation rate from 64.6% to 66.1%. Still, the unemployment rate was huge to reduce unemployment from 5.2% to 4.6%. Considering the differences, the AUD / USD earthquake quickly died. It currently sells at 0.715. RBA buyer Lowe announces three options for the bond purchase program (currently $ 4bn a week) before releasing the data. Two of them include recording and completing QE or review in May. The third and most likely option in the new labor market report is to stop purchases in February. In a relative increase, Lowe reiterated that conditions may not be met by 2022.