Our Scans · (FS.5.04) Money Market · Weekly Summary

• As expected, the Reserve Bank of India has maintained its focus on monetary stability by keeping the repo rate unchanged at 6.5% for the seventh consecutive time. CNBCTV18
• A reduction in home loan interest rates and repo rates, coupled with special bank and EMI discounts, will be key to supporting continued growth. Mint
• Inflation fell faster than expected in the final quarter of last year and by Christmas money markets were pricing in five interest rate cuts of 0.25% in 2024. The Negotiator
• RBI's decision to hold the repo rate at 6.5% bodes well for Indian Real Estate and its ancillary industries, as it is expected to maintain the ongoing momentum in housing registrations in the final month of the year. Business Today
• The City money markets are currently anticipating around three interest rate cuts in 2024, bringing Bank rate down to 4.5% by December, with the first cut expected by June. The Guardian
• The Turkish central bank is expected to keep interest rates unchanged after 8 consecutive interest rate hikes, which raised the one-week repo rate from 8.5% to 45.0%. XTB.com
• Rabobank does not expect the BOE to cut rates until September, whereas U.K. money markets are pricing in around 41 basis points of rate cuts within six months. MarketScreener
• The Bank of England is expected to hold interest rates at 16-year highs of 5.25 pc tomorrow, with money markets predicting four quarter point cuts in 2024 to take rates to 4.25 pc. The Telegraph
• Money markets are now predicting about a 50 pc chance that the US Federal Reserve will begin cutting interest rates at the next meeting in March. The Telegraph
• The New York Fed takes into account the spread between the 10-year Treasury bond and three-month Treasury bill to determine how likely it is that a U.S. recession will take shape within the next 12 months. Yahoo Finance
• There is no evidence that long-term interest rates have hit a bottom or that during the next decline in short-term yields, 3-month Treasury bills will not provide a negative return as is currently the case in Europe. Global Financial Data
• Money markets are predicting that the Bank of England will begin cutting interest rates from May, with bets implying rates will be cut to 3.75 pc by the end of the year. The Telegraph
• Money markets are betting that the first interest rate cut by the Bank of England will happen by May. The Telegraph
• Money markets are now predicting that the Bank of England will reduce interest rates by five quarter-point cuts in 2024, down from the current levels to 4%. Yahoo Finance
• The probability that the 3-month Treasury bill yield will be negative (as it has been often in Europe and Japan) in 2 years is 1.21% plus 0.03% plus 0.0% = 1.24%. Seeking Alpha
• Panic in the money markets led to an immediate rise in mortgage costs, then after a few months last winter when rates settled back, stubborn inflation prompted the Bank of England to increase rates more rapidly than many had anticipated. The Guardian
• The probability that the 3-month Treasury bill yield will be negative (as it has been often in Europe and Japan) in 2 years is 1.45% plus 0.04% plus 0.0% = 1.48%. Seeking Alpha
• Money markets are pricing in over 100 basis points of rate cuts from both the U.S. Federal Reserve and European Central Bank in 2024, and have shifted the expected timing of the first moves firmly into the first half of 2024. Kitco News
• The safe-haven asset hit $2,017.82 an ounce as the value of the dollar continues to slide amid bets on money markets that the US Federal Reserve will not increase interest rates again. The Telegraph
• The probability that the 3-month Treasury bill yield will be negative (as it has been often in Europe and Japan) in 2 years is 0.98% plus 0.03% plus 0.0% = 1.01%. Seeking Alpha
• German government bond yields hit their lowest in more than two months, with money markets fully pricing in 100 basis point rate cuts by the European Central Bank by end-2024. Reuters
• UK and US bond yields fell steeply as markets began pricing in cuts to interest rates next spring, with money markets at one point giving a 0 pc chance that US interest rates will be increased at the next meeting of Federal Reserve policymakers in December. The Telegraph
• Money markets now are pricing in no further rate increases, and rate cuts as early as June in 2024. Kitco News

Last updated: 23 April 2024