The markets finished evaluating the US Federal Reserve meeting after Jerome Powell’s press conference, which included answering many questions that were capable of being explained by the markets. November, although the Fed did not explicitly announce it, but he mentioned that the time has come and confirmed that the end of the procurement program by mid-2022 would be appropriate, which means that it will announce the reduction of the program at the November meeting, and it is expected that it will be by 15 billion dollars per month (10 billion in bonds). Treasury and 5 billion of mortgage-backed securities (MBS) to last eight months and end in July mid-2022, according to the Federal Reserve.
In response to reporters’ questions at the press conference, Powell mentioned that if the economy continues to develop as we expect, we may announce the date of reducing bond purchases next November, and stressed that he does not expect employment data for the month of September to be excellent, but it is enough for it to be good and for the data to continue in improvement.
The increase in the number of US Federal Reserve members who see a rate hike next year from seven members at the June meeting to nine, in addition to raising inflation expectations, all of this was supportive of the US dollar after the negative initial reaction, while stock markets ignored these expectations after the positive news that eased fears of The Chinese company Evergrande entered the stage of default.
The Evergrande Company will be at the top of the events of today’s session, as the company is scheduled to pay the equivalent of $83.5 million in interest related to March 2022 bonds, and accordingly, it will leave all eyes on the Chinese company after its shares rose by about 18.9% in morning trading today, Thursday, on the Hong Kong Stock
Exchange.
The US dollar has fallen since the beginning of the session today, Thursday, by about 0.20%, and it is trading at 93.25 levels.
Bank of England
The Bank of England will meet today, Thursday, September 23 (September) to announce its monetary policy and interest rates at 2:00 Mecca time, as markets await the bank’s reaction from a rise in inflation to 3.2% in the 12 months ending in August, compared to 2% in the July reading.
The Bank is expected to keep interest rates unchanged at 0.1% and vote 1-8 to maintain the quantitative easing program, but the markets will wait for any indication of when the Bank will start reducing its purchase program and raising interest rates.
The Bank of England and its President Bailey, at the last meeting, expected inflation to rise this year to 4% temporarily and to decline to 2.5% next year, and therefore inflation levels of 3.2% are considered not very worrying on paper so far, but with high expectations that inflation will exceed 4.2 levels % by the end of the year The Bank of England may come under pressure in the coming period .
The British pound is trading on a rise with the beginning of the European session at 1.3655 levels against the US dollar, hours before the bank’s meeting.
06/11/2024
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