Monetary easing hopes around the world are building regardless of Fed pushback. The Swiss National Bank already cut last week, Sweden’s Riksbank indicated rate cuts may be coming in the second quarter and European Central Bank officials continue to lean dovish.
With data showing euro zone bank lending stagnated again last month and German retail sales fell unexpectedly, ECB council member Fabio Panetta was the latest to flag a turn in the rate cycle. “The risks to price stability have diminished and the conditions are materialising to launch monetary easing,” he said.
Although Bank of England hawk Jonathan Haskel was more in Christopher Waller’s camp of holding back on rate cuts for now, UK economic numbers on Thursday confirmed Britain’s economy recorded a recession late last year.
China’s government too looks set to lean heavily on monetary policy to revive its economy.
Not only have People’s Bank of China officials indicated more easing in the pipeline, but the South China Morning Post reported on Thursday that President Xi Jinping had urged the PBOC into buying government bonds there too.
And with Japan’s yen testing 34-year lows this week, there’s concern about a wave of competitive currency depreciation across Asia’s major exporting economies as global trade tensions build.
U.S. Treasury Secretary Janet Yellen said on Wednesday she intended to warn China about the negative effects of Beijing’s subsidies for its clean energy industries, including solar panels and electric vehicles, during a visit to the country.
More broadly, stock markets around the world were steady to high – with Japan’s Nikkei, the underperformer unusually, due mostly to quarter-end effects.
In company news, Britain’s biggest water utility Thames Water said shareholders had refused to stump up the 500 million pounds ($630 million) of equity promised, heightening concerns about its survival, after it failed to agree future bills and conditions with the regulator.
Back on Wall St, Reddit’s stellar market debut has drawn significant bearish bets against the social media forum in its first few days of trading and its stock was down 5% premarket after falling almost 12% on Wednesday.
