Reserve Pledge To Maintain

Highlights - An acceleration in deposit withdrawals, combined with the prospect of an anti-austerity party winning the next election, has brought to the fore concerns about a potential Greek exit from the euro zone. - Our base case assumption is that under the most likely scenario, the Greek election will lead to a government that sticks to an EU/IMF program, even if the terms are renegotiated. - However, we do believe that Greece needs a further restructuring of its debt and we do think the country will ultimately exit the euro - we're just not convinced that Europe is ready for this to happen at the moment. - If an accident does occur and Greece does leave the euro in the near term, it would have global financial ramifications that could range from severe to catastrophic. ...

The Federal Reserve on Wednesday offered a modestly brighter assessment of the economy's prospects and few clues on the path of monetary policy, as it reiterated that interest rates likely will not rise until at least late 2014. The central bank described the economy as expanding moderately, just as it did in March, and said the unemployment rate had declined but remains elevated. In March, it had said the jobless rate had declined "notably." But its statement after a two-day meeting was slightly more upbeat than its March announcement. Fed policymakers nodded to "some signs of improvement" in the housing sector and, while repeating that they expect moderate economic growth in coming quarters, said the recovery should then "pick up gradually." "To support a stronger economic recovery ...

Today the Federal Open Market Committee decided as accustomed and as already forecasted to keep its Federal Fund target interest rates intact, as expected by the markets, at its historical low of 0.00 percent to 0.25 percent, and attesting once again that the country's economic momentum during this past period was "expanding moderately". In fact we should not forget that the FOMC members pledged to keep exceptionally low through at least late 2014 to maintain a stronger economic growth and fulfilling a "highly accommodative" monetary policy, the decision that only Jeffery Lacker disagreed on. As for the country's key sector; the labor market, it has improved clearly this past period and throughout the recent months as shown by several data released mainly from the Commerce Department yet ...

(Reuters) - The Bank of Japan is likely to ease monetary policy on Friday by boosting asset purchases by up to 10 trillion yen ($123 billion) and in doing so may extend the maturity of government bonds it targets to around three years, according to sources familiar with the central bank's thinking. The action, which would be the central bank's second easing in just over two months, would serve to show the BOJ's determination to overcome deflation and reach the 1 percent inflation target adopted at its February meeting. The central bank has been under constant pressure from politicians to do more to rev up the world's third biggest economy, and BOJ policymakers have signalled their readiness to provide more stimulus. But there is no consensus yet within the central bank on whether it ...

China's manufacturing index shows a huge contraction in February, which is increasing the odds for Premier Wen Jiabao to add measures to sustain growth even as he extends a campaign to cool the property prices. As, the PMI preliminary estimates from HSBC Holdings Plc and Markit Economics today recorded 48.1 reading, which is the lowest since November and compares with a final 49.6 in February. Additionally, some economists predict that the current circumstances significantly increase the odds of an interest-rate reduction, also economists expect a system-wide reserve-requirement ratio cut this month or in early April following China’s decision yesterday to boost rural credit by cutting ratios for more branches of Agricultural Bank of China Ltd., the nation’s third-biggest lender by ...

(Reuters) - Despite recent "encouraging" economic news, the Federal Reserve should do even more to boost growth, or risk stagnation that could persist for a decade or more, a top Fed official said on Friday. The Fed earlier this week repeated its pledge to maintain ultra-low interest rates until at least late 2014, but a pronounced drop in unemployment has sparked increasing speculation in financial markets that the U.S. central might begin to raise rates much sooner. But Chicago Fed President Charles Evans, in remarks prepared for delivery at the International Research Forum on Monetary Policy in Germany, said the Fed needs to keep juicing the economy with low borrowing costs. With growth too slow to quickly bring down a still-high jobless rate, "monetary policy can and should take ...

U.S. Stocks May rebound today as a goverment report will show February retail sales in the U.S. probably climbed by the most since September, while the Federal Reserve will mostly reiterate the pledge to keep the federal funds rate near zero through 2014. The U.S Department of Commerce through its Census Bureau will announce today the retail sales figure, probably rose 1.1 percent in February, backed by a buoyant demand on automobiles as improvement in labor market looks to be fueling consumer spending. A rebound in sales of motor vehicle and parts dealers due to higher gasoline prices has likely bolstered the sales last month. Purchases of cars and lights trucks rose to a 15 million annual rate in February by the most in four years, according to figures from Ward's Automobile Group. ...

(Reuters) - Gold traded steady on Thursday, holding on to the first gains it scored so far this week, as fears about a messy default for Greece eased after signs it may be able to secure a crucial debt swap deal. Spot gold was little changed at $1,686.04 an ounce by 0327 GMT, standing above the 200-day moving average of around $1,678. Gold gained 0.6 percent on Wednesday following a 2-percent slide in the previous session. U.S. gold inched up 0.2 percent to $1,687.10. Gold has recuperated from a sharp fall earlier this week on hopes that Greece would secure an international bailout after a pledge by major banks and pension funds to take part in the bond swap deal. Expectations that central banks will continue to promote growth by maintaining easy monetary policy also helped buoy gold, ...

(Reuters) - The debt-ridden euro zone acted as a drag on the world economy at the start of the year and is seemingly destined to slide back into recession just as monetary policymakers are running out of ammunition. Data from the euro zone's private sector published on Monday showed a sharp downturn among Italian and Spanish businesses dragged the currency bloc back into decline last month. Growth slowed in Germany, the region's biggest and strongest economy, and stalled in France. The European data followed slightly more upbeat purchasing managers' indexes (PMIs) from Asia, with China services growth picking up and India's slowing, but maintaining a robust pace. While central bankers in Asia have interest rates to cut, policy rates are at or near zero in most of the developed world and ...