SOUTH KOREA: Country Wrap: Deputy PM Proposes Increase to Supplementary Budget:
Apr-15 05:18
- Korea's Deputy Prime Minister and Finance Minister Choi has proposed an increase to the already additional budget to KRW12tn (US8b) to support key industries that will suffer from the trade war and to respond to the recent natural disasters. The budget is KRW2tn more than previously proposed supplementary budget to support the economy. Choi indicated that the supplementary budget would focus on disaster and emergency response, strengthening competitiveness in trade and AI and supporting the livelihoods of people. (source MNI – Market News)
- South Korea's money supply rose for the 21st consecutive month due to strong demand for deposits and profit-making securities, central bank data showed Tuesday. The seasonally-adjusted M2, or broad money, gained 0.6 percent to 4,229.5 trillion won (2.97 trillion U.S. dollars) in February compared to the previous month, continuing to increase since June 2023, according to the Bank of Korea (BOK). The continued growth was attributed to solid demand for profit-sharing securities and time deposits with a maturity of less than two years. (source Xinhua)
- The KOSPI had a very strong day today rising +1%, following on from yesterday's gain of +0.95%.
- KRW had a strong day with gains of +0.10% to be at 1,420.80
- Bonds were strong across the curve with the 10YR the best performer down -3.5bps at 2.67%
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FED: March Economic Projections: Higher Inflation, Weaker Growth, Same Rates
Mar-14 21:28
The MNI Markets Team’s expectations for the updated Economic Projections in the March SEP are below.
- The unemployment rate is likely to rise slightly for 2025 alongside a downgrade in GDP growth, while the 2025 core and headline PCE inflation projections are set to rise again. Changes to later years will likely be limited, however.
- More detail on the shift in Fed funds rate medians is in our meeting preview - we will add more color next week.
FED: Market Pricing Nearly 3 2025 Cuts As Conditions Tighten
Mar-14 21:25
Amid rising government policy uncertainty, sentiment among businesses and consumers has fallen sharply since the start of the year, while equities and the dollar have reversed their post-election rise. Overall, financial conditions have tightened, even if stress is not yet mounting, e.g. no major widening of credit spreads (the accompanying chart shows the Fed’s financial conditions impulse index but only through January).
- Combined with growth fears, this has affected expectations for the Fed’s rate path, with around 18bp more cuts expected in 2025 compared with what was seen after the January FOMC. 65bp of cuts are priced for the year as a whole. 2025 cut pricing reached 71bp before the February inflation data and 76bp before the February payrolls report.
- A rate cut is seen with near zero probability for March’s meeting, but the first full cut is just about priced for June, with a second nearly priced by September.
- Chair Powell has no reason to endorse or refute these expectations – he’s likely to be happy with a press conference that ends with little discernable change in pricing.
CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
Mar-14 21:17
- CANADA'S CARNEY ANNOUNCES ELIMINATION OF THE CONSUMER CARBON TAX
