And so it’s released! Germans went all “Nein” to Greece’s application to extend their loan agreement saying it doesn’t meet German conditions. The hard-baller Greek government is “trying to obtain bridge-financing without meeting the conditions of its existing rescue program” according to German Finance Ministry Spokesman Martin Jaeger.
Did you expect massive volatility from Mr. Euro on the Forex Dance Floor? Nein again! As we mentioned before, investors have chilled about about the whole Grexit story (although the media tries to make it a big deal still) so the crab like sideways moves continues for Mr. Euro vr. his counterpart. Well, okay, to be fair we did see SOME down moves this morning but that’s abut it.
FOMC Minutes: Concerns about hiking too soon
I guess the bigger news over the past 24 hours was the FOMC meeting minutes which led to a sell-off of Ms. USA. after the FOMC dropped the “considerable time” phrase and mentioned that they “can be patient” considering policy normalization in their latest statement, many believed that the minutes of their meeting would contain more clues on timing of the Fed’s rate hike this year. However, yesterday’s minutes suggest that policymakers aren’t in a rush to tighten just yet.
Even though the U.S. economy has been churning out one impressive report after another, Fed officials said that there are still plenty of risks associated with raising interest rates too soon. With that, they are inclined to keep rates near zero “for a longer time” especially since inflationary pressures have been weakening.
Fed head Janet Yellen clarified that they’d like to be “reasonably confident” that inflation can reach its 2% target before expressing any rate hike biases.
Swiss National Bank Surprises Again
Never matched their Black Thursday surprise, but the Swiss National Bank in another relatively surprising move are expected to employ new measures which will prevent the hoarding of cash. The move aims to prevent arbitrage to the negative interest rates on deposits by introducing a steadily increasing deposit fee on paper cash. This cash storage must be made unprofitable, in the hope that with fees and low interest rates elsewhere businesses and individuals are more likely to put this money to work elsewhere.
China lowered its US treasury holdings for a fourth consecutive month as reserve growth slows. China, still the largest holder of foreign treasuries, perhaps know something that the rest of the markets do not. Japan on the other hand, following China in second place are bolstering their holdings as annual exports jumped the most they have done since 2013 in an encouraging sign that the weak yen is finally boosting the nations export engine, it took nearly two years for the weaker yen to have effect but it would seem that finally it has. With stronger demand from Asia and the US Japan is expected to return to a trade surplus next quarter perhaps even earlier.
Our weekly Japanese video is out by the way. Spread the word to your Japanese friends!