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EU High Representative for Foreign Affairs and Security Policy Kallas: Russia must pay for the damage caused to Ukraine.On October 23rd, the Swiss National Bank (SNB) decided to keep interest rates unchanged at 0% last month, according to meeting minutes released Thursday. The bank concluded that the Swiss economic outlook and future inflation meant negative interest rates were unnecessary. In its first release of the minutes, the SNB stated that monetary policy was currently supporting the economy, and the full impact of the previous rate cuts had yet to be felt. The SNB stated that US tariffs had only impacted a portion of the Swiss economy, with "little" evidence to date of negative impacts on exports spilling over to other sectors of the economy. The inflation forecast and economic outlook supported the rationale for maintaining monetary policy. Against this backdrop, the Governing Council concluded that further easing of monetary policy would be inappropriate.On October 23rd, the Swiss National Bank published the minutes of its interest rate-setting meetings for the first time on Thursday. This move signals an effort by the traditionally conservative central bank to catch up with other central banks. The SNB held its benchmark interest rate at zero last month, the lowest among major central banks. The bank warned that US tariffs have dimmed the outlook for the Swiss economy through 2026. The Federal Reserve has been publishing minutes of its rate-setting committee meetings since 1994, while the European Central Bank has been publishing details of its discussions since 2015.Swiss National Bank meeting minutes: There is little sign that the negative impact of tariffs is spreading from affected export-oriented industries to other areas of the economy.Swiss National Bank meeting minutes: The Swiss economic outlook remains uncertain.

Gold Price Forecast: XAU / USD bears move in for the kill ahead of a key event, Fed's Powell

Alina Haynes

Mar 07, 2023 11:57

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Even though the US Dollar fell and yields increased advance of Jerome Powell's testimony before Congress, gold prices were slightly weaker during the US session. After breaking a streak of four consecutive weekly declines, the yellow metal was falling below $1,850. Initially, China's modest growth objective led to a strengthening of the US dollar, but Powell is expected to reiterate the view that rates will rise faster than predicted.

 

Recent statements by Fed officials have reaffirmed the need to continue raising interest rates until they reach at least 5%, and a plethora of data points in that general direction. "Several regional Fed presidents have signaled an openness to higher interest rates and larger increases if the data remain robust. It would mark a shift in the Fed’s guidance if Powell articulates similar sentiments at tomorrow’s testimony and a step back from the cautious policy around rates,'' analysts at ANZ Bank said.

 

Recent strength in Nonfarm Payrolls and Retail Sales data suggests that policy is not restrictive enough, and the Fed may have been caught off guard by weak fourth-quarter data. The analysts added that the Fed might benefit from highlighting the significance of short-term inflation expectations and current inflation in its estimates of restrictiveness.

 

In the meantime, the Nonfarm Payrolls data will be the focus, as many Fed members are anticipating a slowdown in job growth following January's surge of over 500,000 new positions. However, if the employment market doesn't cool sufficiently, the markets will likely see that the March FOMC meeting will likely see a 50bp hike, which is anticipated to impact heavily on the Gold price. ''A return to CTA selling could be in the cards as prices still tantalize with a break below the 200dma and key $1,800/oz mark,'' analysts at TD Securities argued.

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