Bank of Japan Leaves Policy Unchanged

Daily Analysis - 16/06/2016

BoJ Keeps Interest Rate Negative: -0.10%

The BoJ by a majority of 8 - 1 decided at its policy meeting today to hold off from cutting interest rates or changing monetary stimulus, which stands at 80 trillion yen. The BoJ said that Japan's economy was likely to continue expanding at a moderate trend but warned that annual inflation may likely remain near zero percent for the time being, but remained optimistic that it will eventually pick up.

French CPI Stays Flat in May

Consumer prices in France remained unchanged in May after falling for three consecutive months. The CPI was revised from previously estimations of -0.10% in May, data from Insee showed. On a monthly basis, French consumer prices gained 0.40% as expected, and extended the gains from April's 0.10% increase. Prices gained as food prices increased on account of a rise in petroleum prices, for the third month straight. Another measure of inflation, the harmonized index of consumer prices or HICP was up 0.50%.

UK Unemployment Rate Falls to 2005 Lows

Unemployment in the UK fell to the lowest levels since October 2015 according to the ILO UK jobless rates, which fell to 5.00% in the three months leading to April after remaining steady at 5.10% for five months. The employment rate was also at a high, rising to 74.20%. The last few months have seen average earnings including bonuses rise 2.00% while excluding bonuses, average earnings jumped 2.30%, both beating analyst estimates. In May, the claimant count rate was steady at 2.20%, modestly higher than forecasts of 2.10% while the number of people claiming unemployment benefits decreased by 400.

Federal Reserve Leaves Interest Rate Unchanged

At the FOMC meeting yesterday, the US Federal Reserve left the Fed fund rates unchanged at 0.50%, as widely expected. The decision was also unanimous for the first time since January. Federal Reserve officials remained divided on the rate hike outlook this year, with participants torn between one and two rate hikes. The Fed maintained its view that interest rate hikes will be gradual and did not give any indications on their schedule. The FOMC statement acknowledged the recent decline in the jobs report in May but expressed confidence that it was only transitory, while FOMC staff economic projections showed that Fed officials expect the US economy to rise 2.0% in 2016, slightly lower than March’s prediction.

New Zealand GDP Rises 0.70% in Q1, 2016

New Zealand's quarterly GDP expanded at a pace of 0.70% on the quarter, data from Statistics New Zealand showed earlier today. The increase in GDP topped analyst expectations who forecasted growth at 0.50%. In the fourth quarter of 2015, New Zealand's GDP expanded 0.90%. The gains came largely due to a healthy construction sector, with activity rising 4.90%. The construction sector's growth was the strongest in the industry since March 2014. On a yearly basis, New Zealand's GDP expanded at a pace of 2.80%, rising above forecasts of 2.60% and up from 2.30% in Q4, 2015.