- The path of interest rates grew hazier in the weeks after the Federal Reserve raised rates in December as central bank policy makers pondered escalating turmoil in global markets, according to minutes from the Fed’s January meeting.
The Fed voted to leave interest rates alone at the January meeting and acknowledged in its statement rising concerns for a global economic slowdown would play a role in future decisions to raise rates.
- It would be "unwise" for the U.S. Federal Reserve to continue hiking interest rates given declining inflation expectations and recent equity market volatility, St. Louis Fed President James Bullard said on Wednesday in comments that mark a stark change of direction for one of the Fed's more hawkish inflation foes.
- The Producer Price Index for final demand advanced 0.1 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices decreased 0.2 percent in December and advanced 0.4 percent in November. On an unadjusted basis, the final demand index declined 0.2 percent for the 12 months ended in January.
The increase in the final demand index for January can be traced to a 0.5-percent advance in prices for final demand services. In contrast, the index for final demand goods moved down 0.7 percent.
In January, the index for final demand less foods, energy, and trade services advanced 0.2 percent for the second consecutive month. For the 12 months ended in January, prices for final demand less foods, energy, and trade services climbed 0.8 percent.
- U.S. housing starts unexpectedly fell in January likely as bad weather disrupted building projects in some parts of the country, in what could be a temporary setback for the housing market.
- U.S. manufacturing output rose in January by the most since July 2015, a sign the industry was starting to stabilize at the beginning of the year.
- U.S. industrial production in January rose by the most in 14 months as manufacturing and utilities output increased, the latest sign the economy regained some ground early in the year.
The 0.5 percent advance at factories, which make up 75 percent of all production, followed a 0.2 percent decrease the prior month, a Federal Reserve report showed Wednesday. Total output, which also includes mines and utilities, jumped a larger-than-projected 0.9 percent.
- Policymakers need more data on economic activity and lending to judge the impact of the Bank of Japan's surprise adoption of negative interest rates last month, Japanese Economy Minister Nobuteru Ishihara said on Wednesday.
Since the BOJ took such a bold step, it is important for the government to work with the central bank to ensure the economy grows and does not return to deflation, Ishihara told reporters in a group interview.
Ishihara also said the government's plan to raise the sales tax next year to 10 percent from 8 percent is important for fiscal discipline, but implementation becomes a political decision if there is a big shock to the economy.
- U.S. crude futures rose as much as 3 percent in early Asian trade on Thursday after Iran backed plans by Russia and Saudi Arabia to cap crude oil production at January levels, extending steep gains in the previous session.
U.S. crude (CLc1) jumped $1.06 shortly after Asian markets opened, and was trading up 77 cents at $31.43 a barrel as of 6.46 p.m. ET, up 2.5 percent. The U.S. benchmark surged 5.6 percent in the previous session to close at $30.66 a barrel.
"The price rebound looks like an overreaction as the probability of Iran not increasing production is still low in our view," ANZ said in a note on Thursday.
- Oil extended gains above US$31 a barrel on Thursday (Feb 18) as Iran supported a proposal by Saudi Arabia and Russia to freeze production at near-record levels, without saying whether it would curb its own output.
Reference: Reuters, bls.gov, Bloomberg, Foxbusiness, Investing, Straitstimes
Thai
Eng