Yazar: Geoffrey Smith
Investing.com – The Fed will not change interest rates or the pace of buying bonds, but will release a new guide and growth forecast when its two-day meeting is over. It will also say whether it intends to end or extend the legal gaps in bank capital requirements that could have a major impact on the bond market in the near term. Brazil’s is the only central bank that can raise rates. Samsung warned that the global chip shortage will not end anytime soon, and the International Energy Agency (IEA) downplayed the rhetoric of a new ‘super cycle’ for oil, reminding everyone that prices are still inflated by the OPEC + block.
Here’s what you need to know in financial markets on Wednesday, March 17th.
1. Fed meeting will be over; eyes on SLR with dot plots
Fed money and then President Jerome Powell’s press conference will take place.
Changes in basic interest rates or asset purchase rates are not possible. Therefore, the attention of the market will be particularly in the Fed guide – when the ‘dot graph’ showing Fed officials’ rate expectations changes to reflect political tightening earlier than assumed so far.
Another thing worth noting: The Fed will decide whether to extend the exemption from the existing Supplemental Leverage Ratio (SLR) for banks as a binding capital requirement that expires at the end of March. If the exemption is not extended, banks may have difficulty paying shareholders and absorbing the high volumes of Treasury bonds issued this year.
2.The only central bank to raise interest rates
Unlike the Fed, which believes inflation is not a short-term risk, the Brazilian Central Bank (BCB) is on Wednesday amid rapidly rising prices and massive loss of confidence in President Jair Bolsonaro’s policies.
BCB is expected to raise interest rates by 50bp to 2.50% in an effort to prevent a decline of more than 10% against the dollar in the last three months. Inflation rose above 5% to a four-year high.
Brazil’s move heralds the transition of central banks in emerging markets to tighter monetary policy, especially those whose currencies are under pressure as the dollar begins to strengthen. and central banks are also expected to publish a more hawkish guide this week, even if they don’t raise their own core interest rates.
3. Stock markets will be mixed; UBER gave up in England
US stock markets are opening mixed in narrow gaps with the loss of volatility before the Fed announcement.
and fell 0.2% while remaining calm.
It will be with data for February ahead of the Fed announcement. In addition, weekly figures regarding mortgage interest and refinancing will be shared.
Among the stocks that may be of interest is Uber (NYSE :), which has finally given up in its battle of not treating UK drivers as employees. In addition, eyes will also be on Alphabet (NASDAQ 🙂 and Apple (NASDAQ 🙂 after Google reduces the fee it receives from app developers from 30% to 15% for the first $ 1 million winners through the Google Play store. This development is unlikely to please app developers like Fortnite publisher Epic Games, which filed antitrust lawsuits against what it saw as monopoly fee structures.
4.Samsung warns of semiconductor shortage
Samsung (KS 🙂 warned of the “serious imbalance” seen in the world market for semiconductors, adding that this problem cannot be solved in the near future.
Co-CEO Koh Dong-jin said at the company’s annual shareholder meeting that the company’s foundry in Austin, Texas, was still offline due to restructuring after the cold weather caused it to cease operations last month.
The closure of the foundry, along with other facilities owned by Texas Instruments (NASDAQ :), increased a supply shortage that led Honda to suspend part of US production on Wednesday. Toyota said its production would take a hit due to the shortage of certain petrochemicals – another example of how the epidemic is impacting fragility in complex global supply chains.
5.IEA ignores super loop rhetoric
Prices fell after the International Energy Agency (IEA) downplayed the words of a new ‘super cycle’ in its latest monthly report on the state of the oil market. He pointed to the historically high stock levels and the fact that prices were supported by the ‘OPEC +’ agreement with a daily cut of around 8 million production.
Stocks in developed economies fell for six consecutive months until January, but this is 63.2 barrels above the 5-year average and 110 million barrels above a year ago levels, according to the IEA.
It will be announced at the usual time of the US government.