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Mon, 20th February 2017

Anirudh Sethi Report

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Archives of “February 8, 2017” Day

Copper Jumps Ahead Of Strike At World’s Largest Mine

While copper stockpiles (at COMEX) are at their highest since 2004, prices have remained relatively high thanks to Trumpflation hopes, China stimulus hype, and Indonesia’s export ban. However, recent short-term weakness (following China’s tightening move) have been erased overnight as prices jump on news of a strike at Escondida mine in Chile – the world’s largest – due to begin tomorrow.

Despite massive inventories…

Supply concerns are back on the agenda for traders as The Wall Street Journal reports workers at the world’s largest copper-mining operation are expected to strike on Thursday, driving up copper prices on fears of a shortage of the metal and expectations it could trigger stoppages at other mines.

While copper stockpiles (at COMEX) are at their highest since 2004, prices have remained relatively high thanks to Trumpflation hopes, China stimulus hype, and Indonesia’s export ban. However, recent short-term weakness (following China’s tightening move) have been erased overnight as prices jump on news of a strike at Escondida mine in Chile – the world’s largest – due to begin tomorrow.

Despite massive inventories…

Supply concerns are back on the agenda for traders as The Wall Street Journal reports workers at the world’s largest copper-mining operation are expected to strike on Thursday, driving up copper prices on fears of a shortage of the metal and expectations it could trigger stoppages at other mines.

RBI keeps repo rate unchanged at 6.25% -Full Text

Sixth Bi-monthly Monetary Policy Statement, 2016-17 Resolution of the Monetary Policy Committee (MPC), Reserve Bank of India On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) decided to: • keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.25 per cent. Consequently, the reverse repo rate under the LAF remains unchanged at 5.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent. The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of achieving consumer price index (CPI) inflation at 5 per cent by Q4 of 2016-17 and the medium-term target of 4 per cent within a band of +/- 2 per cent, while supporting growth. The main considerations underlying the decision are set out in the statement below. Assessment

2. Global growth is projected to pick up modestly in 2017, after slowing down in the year gone by. Advanced economies (AEs) are expected to build upon the slow gathering of momentum that started in the second half of 2016, led by the US and Japan. However, uncertainty surrounds the direction of US macroeconomic policies with potential global spillovers. Growth prospects for emerging market economies (EMEs) are also expected to improve moderately, with recessionary conditions ebbing in Russia and Brazil, and China stabilising on policy stimulus. Inflation is edging up on the back of rising energy prices and a mild firming up of demand. However, global trade remains subdued due to an increasing tendency towards protectionist policies and heightened political tensions. Furthermore, financial conditions are likely to tighten as central banks in AEs normalise exceptional accommodation in monetary policy.

3. International financial markets turned volatile from mid-January on concerns regarding the ‘Brexit’ roadmap and materialisation of expectations about economic policies of the new US administration. Within the rising profile of international commodity prices, crude oil prices firmed up with the OPEC’s agreement to curtail production. Prices of base metals have also increased on expectations of fiscal stimulus in the US, strong infrastructure spending in China, and supply reductions. Geopolitical concerns have also hardened commodity prices. More recently, the appetite for risk has returned in AEs, buoying equity markets and hardening bond yields as a response to the growing likelihood of further increases in the Federal Funds rate during the year. Coupled with expectations of fiscal expansion in the US, this has propelled the US dollar to a multi-year high.

Bank of Thailand holds rates at 1.5%

The Bank of Thailand has opted to hold interest rates at 1.5 per cent as forecast by analysts.

The BoT’s policy committee voted unanimously to keep rates at their current level, where they have been since the last cut in March 2015.

Thailand’s gross domestic product grew 3.2 per cent year on year in the third quarter slightly behind a median forecast of 3.4 per cent. GDP figures for the fourth quarter are set to be released on February 20th.

Looking ahead, the BoT will want to keep monetary policy accommodative to support the economy. The latest data suggest the economy ended 2016 on a softer note. The central bank’s private consumption and investment indicators both weakened in Q4, while a recent crackdown on cheap tour packages has hurt the tourism sector.

Obama Spotted Vacationing On Private Island With Billionaire Buddy Branson

After spending nearly $100 million taxpayer dollars on vacations over the course of 8 years , Obama couldn’t wait to retire to go on even more vacations.  In fact, the Obamas wrapped up their last official $4 million, taxpayer-funded trip to Hawaii on January 2nd, then departed the White House on January 20th and headed straight for Palm Springs for some golf just before joining Billionaire Richard Branson on his private island in the British Virgin Islands. 

Of course, the pictures that have emerged are sure to give Chris Matthews, as well as many of his other colleagues as MSNBC, that old fashioned “thrill up the leg” as they long for the good ole days under Obama rule.

Obama

Obama

BOJ’s government bond holdings top 40% for 1st time

The Bank of Japan’s holdings of Japanese government bonds has topped 40% of the outstanding balance for the first time, the central bank said Wednesday.

The BOJ has been snapping up JGBs in large quantities since it implemented drastic monetary easing measures in April 2013.

  Statistics released by the bank show that its JGB holdings stood at about 358 trillion yen ($3.19 trillion) as of the end of January, or about 40% of the outstanding total of some 894 trillion yen.

Last September, the BOJ switched its policy focus from quantity to interest rates, aiming to keep long-term rates at around 0% to achieve its inflation target. Nevertheless, its JGB holdings continue to rise, with the bank sticking to its annual target of 80 trillion yen for JGB purchases.

With the amount of such bonds circulating in the market declining, “the bank will reach the limits of its bond purchase program as early as the first half of 2019,” said Takenobu Nakashima of Nomura Securities.