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Central Banks Introduce Hawkishness On 21 April, the Bank of Canada was the first industrial country's central bank to signal a reduction in stimulus and a normalisation of monetary policy. Since then, there has been a hint of hawkish sentiment from the Bank of England by chief economist Andy Haldane who views inflation as an increasing threat. We have also seen a positive statement from the Reserve Bank of New…
It has been a few months since we saw the first reports of economic recovery in China. If we look at the GDP stats, China's significant down fall was first quarter of 2020, at the outbreak of Covid, which was compensated in the next two quarters. Another indicator of recovery has been the decline in the jobless rate. During the worst of covid lockdown in the spring of 2020, between…
Australian Unemployment and the RBA's Response During the Covid Pandemic The Reserve Bank of Australia or RBA is Australia's central bank. It is the custodian of the country's monetary policy and aims to contribute to: The stability of the currency of Australia; The maintenance of full employment in Australia; and The economic prosperity and welfare of the people of Australia. As the central bank decides on and institutes its various…
The U.S. presidential election of 2020 was a hotly-contested battle between two candidates with very different ideologies. Among the key areas of contrast were views toward climate change and energy production. Accordingly, the electoral cycle was defined by conflicting policies from pro-energy incumbent President of the United States (POTUS) Donald Trump and environment-friendly challenger Joe Biden. Upon Biden securing a 306 to 232 victory in the Electoral College, U.S policies…
What Is Ant Group? Ant Group is a large Chinese financial services and technology company that is closely affiliated with Alibaba, the giant Chinese ecommerce site. Ant was founded in 2004 and then spun off as a separate company in 2014. Alibaba still owns a 33% stake in Ant. Ant is the parent company of Alipay, China's largest mobile payments platform, which was created largely to facilitate spending on Alibaba.…
What Are Investment-grade Bonds? Investment-grade bonds—also known as "high-grade" bonds—are debt securities issued by corporations and municipal governments that are generally considered to have a low risk of default. Bonds in this category are generally rated Baa or better by Moody's Investors Services and BBB or higher by S&P Global Ratings and Fitch Ratings, the three main credit rating agencies. By contrast, bonds rated below these designations are called non-investment…
What Are Animal Spirits? "Animal spirits" is a term coined by the British economist John Maynard Keynes to describe emotional or "gut" instincts by investors and businesspeople to take risks rather than based on any empirical evidence. Writing in his 1936 classic, "The General Theory of Employment, Interest and Money," during the Great Depression, Keynes described animal spirits as "a spontaneous urge to action rather than inaction, and not as…
A U.S. administration headed by former Vice President Joe Biden is likely to take a different turn from the outgoing President Donald Trump administration when it comes to financial and economic matters. Trump was distinctly more pro-business and market friendly, reversing or rolling back many of the regulations and laws enacted by President Barack Obama. However, Biden is likely to do the same to many of Trump's policies and revert…
Political uncertainty is a key forex market driver, stimulating participation, order flow and volatility. Whether it's a forced regime change or democratic election, politics can quickly sway currency valuations around the globe. Accordingly, one of the most important forex market fundamentals is a U.S. General Election. Held on Tuesday, 3 November 2020, the U.S. General Election will decide the American government's makeup for years to come. Seats in the Senate…
Throughout the U.S. electoral cycle of 2020, a collection of unique events drove a spirited race for the White House. Dubbed by political pundits as "the most important election of our time," Election 2020 featured incumbent Republican Donald Trump against Democratic challenger Joe Biden. Issues such as social welfare, homeland security, economic growth and the coronavirus (COVID-19) pandemic defined the contest. From an economic standpoint, the difference between Trump and…
The government and the Reserve Bank of Australia, like their counterparts in other major countries, have enacted several measures to protect and stimulate their economies in the wake of the coronavirus pandemic. Reserve Bank And Banking System On 3 March the Reserve Bank's board lowered its benchmark cash rate, which is the interest rate on unsecured overnight loans between banks, by 25 basis points to 0.50% and said it "is…
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