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A Reuters poll found that 58% of economists surveyed believed the addition of two dovish scholars to the Bank of Japan would not make raising interest rates more difficult.A Reuters poll shows the median forecast indicates the Bank of Japan will raise interest rates to 1.25% in the first quarter of 2027 and to 1.50% in the first quarter of 2028.A Reuters poll of 64 economists indicated that the Bank of Japan will keep its benchmark interest rate at 0.75% on March 19.A Reuters poll found that 60% of economists surveyed expect the Bank of Japan to raise its benchmark interest rate to 1.00% by the end of June (up from 58% in the February poll).March 11th - Amidst the uncertainty stemming from the ongoing conflict with Iran, market expectations for a potential interest rate hike by the Bank of Japan have weakened. Against this backdrop, demand for Japanese five-year government bonds was stronger than the 12-month average. The bid-to-cover ratio for this auction was 3.69, higher than the previous auctions 3.10 and the 12-month average of 3.44. Following the auction, Japanese bond futures narrowed their losses. Soaring oil prices coupled with a depreciating yen have increased the risk of Japan sliding into stagflation, prompting the government to increase fiscal spending and complicating the central banks tightening measures. The five-year yield, sensitive to monetary policy expectations, is currently trading around 1.64%. Strong demand at last weeks 30-year government bond auction indicates that investor demand remains robust despite the war factor. Next weeks 20-year government bond issuance will also be closely watched as investors assess how Middle East tensions might affect Prime Minister Sanae Takaichis fiscal agenda.

Gold Price Prediction: XAU/USD surges above $2,010 as Fed policymakers anticipate a rapid decline in US Inflation

Daniel Rogers

Apr 12, 2023 13:41

截屏2023-04-06 下午4.26.46_1024x576.png

 

In the Asian session, the price of gold (XAU / USD) made a swift advance above the critical resistance of $2,010.00. The price of gold has risen above $2,013, as the US Dollar Index continues to weaken. (DXY). The USD Index has fallen to approximately 102.05 and is anticipated to accelerate its decline. Federal Reserve (Fed) policymakers anticipate a rapid deceleration in U.S. inflation, which has a negative influence on the USD Index.

 

Patrick Harker, president of the Federal Reserve Bank of Philadelphia, stated, "I am monitoring the data to determine if additional action on inflation is necessary." In addition, the president of the Minneapolis Fed Bank, Neel Kashkari, anticipates that inflation will be in the middle 3 percent by the end of this year and will be closer to 2 percent the following year.

 

Austan Goolsbee, president of the Chicago Fed, advocated a cautious approach in light of the fact that the confluence of constrained credit conditions and further restrictive monetary policy can impact sectors and regions differently than if monetary policy acted alone.

 

As the last inflation data before the Federal Reserve's scheduled interest rate decision in the first week of May, the US inflation data released on Wednesday will be closely monitored.

 

In addition, the Fed minutes will be scrutinized as they will provide a detailed explanation of the 25 basis point (bps) rate hike in March.

 

The demand for US government bonds appears to be subdued prior to the release of US inflation data. The yield on 10-year US Treasury bonds fluctuates around 3.43 percent.


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