The past six weeks have turned the investing world on its head, leaving market participants in a state of suspense regarding the future of U.S. monetary policy and the ripple effects it may have on financial markets. As the Federal Reserve prepares to keep its policy interest rates on hold, all eyes are on Chairman Jerome Powell to offer some clarity.
This week, investors’ attention is fixated on the actions of central banks, particularly the Federal Reserve and the European Central Bank (ECB). The backdrop to this anticipation has been set by the unexpected rate hikes from the Reserve Bank of Australia and the Bank of Canada, which occurred last week. These moves, contrary to the prevailing consensus, have not only sent ripples through the financial markets, but also reshaped the discourse around the durability of current interest rates. The financial community is now confronting the stark realisation that the much-anticipated rate cuts may not materialise this year, and possibly might not surface until well into the next year.
Source: Dreamstime | Author: Kontakt5956
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With close to 250,000 more UK households now facing destitution despite the lowest unemployment figures in almost 50 years, most economists unanimously agree that the country has a 40% chance of entering a recession before the year is over.
Sources: Dreamstime | Author: DeltaStock
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European countries are generating huge deficits this year, while at the same time the bond market has slowed to a crawl and is forcing central banks to make difficult decisions that could affect the entire economy.
Here’s what Martin Tarpanov, head of DeltaStock’s “Fixed Income Securities” department, makes of the whole situation and where it could be headed next.
Source: Pixabay | Photographer: geralt
Reading time: 6 minutes
In an age of fast-spreading viruses and instant contactless payments, it makes perfect sense that the nations of the world are toying with the idea of bringing their currencies in the digital realm. Following the steps of People’s Bank of China and Sweden’s Riksbank, at the beginning of October, the European Central Bank was the latest financial institution to propose the digital equivalent of its official currency – the euro.