Morgan Stanley: Federal Reserve To Hike Rates At ‘Snail’s Pace’ In 2016
Tuesday December 01, 2015 15:18
Morgan Stanley looks for the Federal Open Market Committee to hike U.S. interest rates at a “snail‘s pace.” In its 2016 economic outlook, Morgan Stanley calls for below-consensus economic growth of 1.8% in 2016 and 2017. The firm also says the Fed’s 2% core inflation target remains “elusive.” Morgan Stanley looks for a “snail's pace of policy tightening,” commenting, “following a December hike, we expect the Fed to pause until June 2016, followed by further hikes in September and December for an end-2016 target rate at 1.125%. Four hikes in 2017 bring the year-end target to 2.125%.”
By Allen Sykora of Kitco News; asykora@kitco.com
BMO: Softer-Than-Forecast Payrolls Would Not Necessarily Nix Fed Rate Hike
Tuesday December 01, 2015 09:44
A weaker-than-expected U.S. report on nonfarm payrolls, due out Friday, would not necessarily kill the possibility of the Federal Reserve tightening monetary policy this month, cautions BMO Capital Markets. Nonfarm payrolls are expected to rise by 200,000 to 210,000, while the ADP data for private-sector employment due out Wednesday is expected to show a rise of 180,000 to 190,000 jobs. “Our discussions over the past week suggest that there remains a negative bias for precious metals in U.S. dollar terms; bad news is bad news, but good news is no news,” BMO says. “If the data is disappointing, i.e., nonfarm below 170K, it doesn’t necessarily derail the expectation for a Fed rate hike -- thus not necessarily positive for precious metal prices -- but if the print beats, then there is still downside for gold.” Meanwhile, BMO adds, the announcement by the International Monetary Fund to include the Chinese yuan in its special drawing rights basket as of Oct. 1, 2016 had little impact on commodity prices.
By Allen Sykora of Kitco News; asykora@kitco.com
HSBC: Rise In U.S. Jewelry Imports ‘Good News’ For Platinum
Tuesday December 01, 2015 09:44
HSBC describes a report on platinum jewelry demand, released Monday by the GFMS team of Thomson Reuters, as “good news” for the metal. U.S. platinum jewelry imports jumped in the third quarter by 85%, according to the report. Platinum jewelry imports surged to nearly 9,700 ounces. This comes after a year-over-year rise of 7% and 39% in the first and second quarters, respectively. “The main platinum jewelry market is China, where prices at the retail level still do not reflect the full extent of the fall in platinum prices,” HSBC says. “Still, we believe we are trading at levels in both platinum and palladium that will invite bargain-hunting purchases.”
By Allen Sykora of Kitco News; asykora@kitco.com
TD Securities: Muscular Dollar Likely To Remain ‘Negative Force’ For Commodities
Tuesday December 01, 2015 09:44
Expectations for diverging U.S. Federal Reserve and European Central Bank monetary policy may well continue to boost the U.S. dollar at the expanse of commodities, says TD Securities. Commodities tend to move inversely to the greenback, as a stronger dollar makes them more expensive in other currencies, and vice-versa. “Given that we will likely see additional stimulus being announced by the ECB on Dec. 3 and a Fed hike on Dec. 16th, it is reasonable to assume that the USD will remain strong and is likely to continue to serve as negative force for commodity prices across the complex,” TDS says.
By Allen Sykora of Kitco News; asykora@kitco.com
