On Thursday and overnight on Thursday to Friday, we learned about the decisions of five major central banks. The United Kingdom, Norway, Turkey, China, Japan – none of these countries, however, changed interest rates at these meetings.
UK: No Change in Rates
At yesterday’s meeting of the Bank of England, as expected, there were no changes in interest rates. The main rate remained at 5%. This is one of the few institutions that reports the voting breakdown. It turns out that this decision was almost unanimous. Out of nine members, as many as eight supported the lack of changes. One person voted for a decrease. Markets reacted with a strengthening of the Pound. The most likely reason for this was that they were surprised by a larger change by the ECB last week and the FED this week. Some observers began to see a chance for a bigger movement. As a result, investors started buying the Pound while closing their investment positions for a decrease in interest rates.
Turkey and Norway Also Stable
Yesterday, we also learned about the decisions of the central banks in Norway and Turkey. The Norwegians, as expected, kept the rate at 4.5%. However, similar to the United Kingdom, investors were not unanimous. As a result, after the decision, we witnessed a strengthening of the Norwegian krone. In Turkey, interest rates were also maintained at an unchanged level. However, it’s worth noting that this rate is 50% – yes, there is no comma missing there. It seems quite high, but we must remember that in August, Turkey spectacularly managed to curb inflation from 61.78% to “just” 51.97%. Such rapid price increase justifies such high market interest.
Asia Also Doesn’t Change Rates
To add to this series, overnight – or for some in the early morning – we learned about the decisions of two major central banks in Asia. First, the Chinese confirmed that both the one-year and five-year loan rates remain at unchanged levels. Then the Bank of Japan announced that it is keeping interest rates at the highest level since the end of 2008. This sounds like a high value, but this is Japan, so we are talking about 0.25%. After the decision, we saw a slight strengthening of the yen, which, however, disappeared after the opening of European markets. We must remember that the yen has recently had a very good run and many investors are waiting for the moment to realise profits.
Today, in the macroeconomic data calendar, it is worth paying attention to:
1:00 PM – Eurozone – Public appearance by Christine Lagarde,
2:30 PM – Canada – Retail sales.
Maciej Przygórzewski – The chief analyst at Internetowy Kantor.pl.
Source: https://ceo.com.pl/dzien-braku-zmian-stop-procentowych-56030
