• MTS Economic News_20160322

    22 Mar 2016 | Economic News

As Chinese stocks plunged in July, an official from the nation’s central bank reached out to the Federal Reserve for information about how it handled the 1987 U.S. equities crash, newly disclosed e-mails show.


Song Xiangyan, the People’s Bank of China’s New York-based chief representative for the Americas, sent an e-mail on July 27 to Steven Kamin, director of the international finance division at the Fed board in Washington, to ask how officials handled the stock plunge, according to messages obtained from the Fed through a U.S. Freedom of Information Act request. The correspondence was reported earlier Monday by Reuters.

Kamin responded to say that the Fed would try to respond soon, then later in the day sent the PBOC a summary of the response to Black Monday. He attached seven publicly available Fed documents including meeting records, briefing books and a statement to Congress by then-Chairman Alan Greenspan.

Song told Kamin that the PBOC was interested in details of how the Fed used repurchase agreements to inject cash into the U.S. banking system in 1987.

That shouldn’t be seen as surprising, according to Trinh Nguyen, an economist at Natixis Asia Ltd. in Hong Kong. “This is normal,” she said. “Central banks often ask not just other central banks but also explore options with the private sector, and academic experts, to consider their plan of action.”

It’s not clear which links were sent, but this paper has an overview of the Fed’s response. The Fed also cut the federal-funds rate to 7% from 7.5%, injected reserves into the market for several weeks, and encouraged banks to extend credit to brokers.

Oil prices dipped in Asian trade on Tuesday, giving up gains from the previous session after data showed U.S. crude inventories fell for the first time since January and as commodity prices paused from their recent rally.

U.S. crude futures for May LCOK6, the front month from Tuesday, were down 6 cents at $41.46 a barrel at 0245 GMT, after settling up 0.8 percent at $41.52 on Monday.

The previous front month settled at $39.91 before expiring on Monday.

Brent crude futures for May delivery LCOc1 were 12 cents lower at $41.42 a barrel after rising 0.8 percent on Monday. Brent has risen more than 50 percent from 12-year lows in January.

Iran may join other oil producers planning to freeze production to support prices at a later date, OPEC's secretary general said on Monday, as the country is seeking to raise its exports after Western sanctions were lifted on Tehran in January.

Producers from the Organization of the Petroleum Exporting Countries and non-members are due to meet on April 17 in Qatar discuss the output freeze.

OPEC's secretary general said he hopes that prices have “bottomed” and will continue to rebound, adding that he expects crude to reach “moderate” rather than “high” levels.





Two loud explosions rocked the main airport terminal in Brussels, Belgium on Tuesday, a day after authorities said a new suspect in the Nov. 13, 2015 Paris terror attacks -- possibly the bomb-maker -- was likely lose in the city.

Le Figaro newspaper in Paris reported 11 people are dead and about 20 have been wounded.

Some witnesses told Sky News the blasts struck near the American Airlines desk in the departures hall.

Blast reported at Brussels' Maalbek metro station following airport bombing

A blast has been reported at the Maalbeek metro station in Brussels, which is just meters away from the Gare de Bruxelles-Schuman railway station.


Reference: Bloomberg, MarketWatch, Reuters, CBS News, RT

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