Interest rates week from 19 to 23 Sep 2022

Tuesday, September 20, 2022 - 10:38
Point Trader Group

The most important data expected this week

 

United State

Building Permits (August) - Tuesday (2:30 p.m.)

The revised figures showed that building permits in the United States, a proxy for future construction, fell 0.6% to an annual rate of 1.685 million in July of 2022, the lowest level since September last year. It compares with initial estimates of a 1.3% decline to an annual rate of 1.674 million.

 

Existing Home Sales (August) - Wednesday (4:00 PM)

US existing home sales fell 5.9% to a seasonally adjusted annual rate of 4.81 million in July 2022, the lowest since May 2020 and below market expectations of 4.89 million. Sales fell for the sixth month in a row, reflecting the impact of a peak 6% mortgage rate in early June. The median existing home price for all home types was $403,800, up 10.8% from July 2021, and total home inventory increased 4.8% to 1,310,000 units. Family home sales fell 5.5% to 4.31 million, and cooperative sales were down 9.1% to 500,000 units. “Home sales may stabilize soon as mortgage rates are down nearly 5%, giving an additional boost to the purchasing power of homebuyers,” said NAR Chief Economist, Lawrence Yoon.

 

US Federal Reserve interest rate decision - Wednesday (08:00 pm)

Fed Vice Chairman Lyle Brainard said on Wednesday that interest rates will need to rise further and stay there for some time to provide confidence that inflation is heading lower toward the central bank's 2% target. At some point in the narrowing cycle, she added, the risks of going too far will become more apparent. The Federal Reserve raised the target range for the federal funds rate by 75 basis points to 2.25%-2.5% during its July 2022 meeting, its fourth consecutive rate hike, and pushed borrowing costs to the highest level since 2019. At more than 81% probability of a hike The interest rate increased by another 75 basis points in September.

 

Unemployment Claims Rates - Thursday (2:30 pm)

The number of Americans filing new claims for unemployment benefits fell by 5,000 to 213,000 in the week to September 10, well below market expectations of 226,000. This was the lowest number of weekly jobless claims since the last week of May, highlighting Highlighting a tight labor market and giving the Federal Reserve more room to raise interest rates aggressively. On a non-seasonally adjusted basis, initial claims fell by 16,934 from the previous week to 155,961, with notable declines in Texas (-2601), California (-2.563) and New York (-1.942). The 4-week moving average, which removes weekly volatility, decreased by 8,000 from the previous week to 224,000.

 

Fed Chair Powell Speech - Friday (08:00 pm)

Fed Vice Chairman Lyle Brainard said on Wednesday that interest rates will need to rise further and stay there for some time to provide confidence that inflation is heading lower toward the central bank's 2% target. At some point in the narrowing cycle, she added, the risks of going too far will become more apparent. The Federal Reserve raised the target range for the federal funds rate by 75 basis points to 2.25%-2.5% during its July 2022 meeting, its fourth consecutive rate hike, and pushed borrowing costs to the highest level since 2019. At more than 81% probability of a hike The interest rate increased by another 75 basis points in September.

 

 

United kingdom

BoE Rate Decision (September) - Thursday (1:00pm)

The Bank of England raised its key interest rate by 50 basis points to 1.75% during its August 2022 meeting, its sixth consecutive rate hike, and pushed borrowing costs to the highest level since 2009, in line with market expectations. It's the biggest increase in prices since 1995. The nearly doubling in wholesale gas prices since May is fueling retail energy prices and will exacerbate lower real incomes for UK households and increase UK CPI inflation in the near term. . According to the Bank of England's new forecast, CPI inflation is expected to rise to 13.3% in October, and remain at very high levels for most of 2023, before dropping to a target of 2% two years later. Looking at the growth, the UK is now expected to enter a recession in the fourth quarter that will last for five quarters.

 

euro

ECB Governor Lagarde's speech - Tuesday (07:00 pm)

The European Central Bank raised interest rates by an unprecedented 75 basis points at its September 2022 meeting, after raising rates by 50 basis points in July, matching expectations from most analysts. The principal refinancing rate is now at 1.25%, the marginal lending facility is at 1.5% and the first deposit facility is at 0.75%. Policy makers also said that interest rates should rise further over the next several meetings, aiming to dampen demand and guard against risks of a persistent upward shift in inflation expectations, but any changes will continue to be data dependent and will follow one meeting after another. meeting approach. During the press conference, President Lagarde said the ECB is far from the rate that will help bring inflation back to the 2% target. At the same time, the central bank has significantly revised inflation expectations to an average of 8.1% in 2022, 5.5% in 2023 and 2.3% in 2024, while growth has been revised to 3.1% in 2022, and 0.9% in 2023. , and 1.9% in 2024.

 

Canada

Core CPI (MoM) (August) - Tuesday (2:30 PM)

Canada's annual inflation rate was 7.6% in July 2022, down from a 39-year high of 8.1% the previous month and in line with market estimates. Transportation costs grew at a much slower pace (14.4% vs. 16.8% in June), amid a sharp decline in gasoline (35.6% vs. 54.6%). Also, inflation was lower for shelter (7% vs. 7.1%), household operations, furnishings, and equipment (5% vs. 5.6%), and clothing and footwear (1.4% vs. 2.7%). Meanwhile, inflation continued to rise in food prices (9.2% vs. 8.8%), weighed down by groceries (9.9% vs. 9.4%), while entertainment costs remained stagnant (at 6.2%). Excluding gasoline, the CPI rose 6.6% annually. On a monthly basis, consumer prices rose 0.1%, the slowest rise since December 2021.

 

Switzerland

SNB Rate Decision (Q3) - Thursday (09:30 AM)

The Swiss National Bank raised the interest rate by 50 basis points to -0.25% at its June 2022 meeting, surprising markets who had expected the rate to remain on hold, and did not rule out further rate increases in upcoming meetings. It was the first rate hike since 2007 after the central bank kept the interest rate at its record low of -0.75% since 2015. The decision was made with the aim of counteracting rising inflationary pressures and preventing price growth from spreading more widely to goods and services, after Higher energy and food prices pushed headline inflation to a 14-year high of 2.9%. The Swiss National Bank also confirmed its readiness to intervene in the foreign exchange market if necessary. The bank revised its year-end inflation forecast to 2.8% for this year, compared to a previous forecast of 2.1%, despite the interest rate change. Also, the Swiss National Bank has halted growth forecasts at 2.5% this year, expecting production to remain favorable and unemployment to remain low, if Europe's energy supply is not adversely affected.

 

All times are +2 GMT


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