• Wednesday, April 1, 2020 - 14:00 MNI POLICY: Fed's Rosengren Warns Financial Crisis May Loom 0


    By Evan Ryser

    WASHINGTON (MNI) - Federal Reserve Bank of Boston President Eric Rosengren on Wednesday said he does not have a fatalistic assessment of the U.S. economy, but the COVID-19 pandemic does threaten a financial crisis.

    Rosengren, speaking in a virtual talk hosted by the Greater Boston Chamber of Commerce, said social distancing has "stilled our strong economy" and has "been distorting the credit and liquidity flows that underpin our economy, threatening the greater pain of a full-blown financial crisis."

    He also expects the unemployment rate to rise "dramatically," with social distancing posing a great challenge for low-income workers.

  • Wednesday, April 1, 2020 - 06:30 MNI POLICY: BOC's March Market Notices Near All-Time Record 0


    By Greg Quinn

    OTTAWA (MNI) - Canada's central bank ramped up its publication of notices to financial markets in March as it sought to keep trading liquid through the COVID-19 pandemic.

    The Bank of Canada posted 36 notices on the month, the highest amount since the 38 notices published in March 2009, the height of the financial crisis, according to records back to 2000 reviewed by MNI.

    The balance tips towards more updates delivered this March than in 2009 if you count three regular press releases devoted to touting new market tools.

  • Wednesday, April 1, 2020 - 06:00 MNI POLICY: Broad Dollar Funding Challenges Remain, Says BIS 0


    By Evan Ryser

    WASHINGTON (MNI) - Broader policy challenges remain to ensure U.S. dollar funding markets remain resilient and that central bank liquidity is channelled beyond the banking system, the Bank for International Settlements said in a paper released Wednesday.

    The crisis brought upon by the coronavirus differs from the 2008 financial crisis and requires policies that reach beyond the banking sector to final users, said the paper by BIS economists Stefan Avdjiev, Egemen Eren and Patrick McGuire.

    "[B]usinesses, particularly those enmeshed in global supply chains, are in constant need of working capital, much of it in dollars. Preserving the flow of payments along these chains is essential if we are to avoid...

  • Tuesday, March 31, 2020 - 20:26 MNI DATA IMPACT: BOJ March Tankan: Biz CPI Outlook Down 0


    --Firms 1-Yr Infln Rate Outlook at 0.5%; 0.8% in Dec
    --Firms 3-Yr Infln Outlook at 0.8%; 1.0% in Dec, 5-Yr Infln Rate at 1.0% v 1.1%

    TOKYO (MNI) - The inflation outlook among Japanese companies fell from three months ago, indicating any pickup in consumer prices will remain muted, the Bank of Japan's March Tankan survey released Wednesday showed.

    The survey was conducted from February 25 to March 31.

    The key points from the inflation outlook section of the Tankan follow.

    --In the March survey, companies on average saw the pace of increase in consumer prices for one-, three- and five-years ahead lower than three months ago.

    --Firms...

  • Tuesday, March 31, 2020 - 20:22 MNI DATA IMPACT: BOJ March Tankan: Sentiment Down, Capex Solid 0


    TOKYO (MNI) - Japanese business sentiment worsened sharply from three months ago, weighed down by the drop of demand caused by the spread of the coronavirus, the Bank of Japan March Tankan Business Survey published Wednesday shows.

    Many firms expect sentiment to further worsen three months ahead amid the heightened uncertainties over the recovery of global demand and the end of the pandemic.

    However, the Tankan showed capital investment plans by major and smaller firms remain around historical averages, somewhat easing BOJ concern over an imminent reversal of a virtuous cycle from corporate profits to spending.

    The capex outlook indicated that business plans haven't been strongly affected by the sharp worsening of...

  • Tuesday, March 31, 2020 - 08:30 MNI: Fed Launches Repo Facility for Foreign Central Banks-Text 0


    WASHINGTON (MNI) - The Federal Reserve said Tuesday it will establish a repo facility for foreign central banks starting April 6 to help reduce risks to U.S. financial markets caused by financial stresses abroad.

    "The facility reduces the need for central banks to sell their Treasury securities outright and into illiquid markets, which will help to avoid disruptions to the Treasury market and upward pressure on yields," the Fed said in a statement.

    The term of the agreement will be overnight, but can be rolled over as needed, the Fed said. The interest rate is set at 25 bps over the interest on excess reserves rate, generally higher than private repo rates when the Treasury market is functioning well, the Fed said. IOER is...