Banking

NEW YORK (Capital Markets in Africa) – In the court of investor opinion, the verdict is in. The Federal Reserve is guilty of quantitative easing. Never mind that Chairman Jerome Powell tells everyone his efforts to shore up funding markets are “in no sense” QE. Try as policymakers may, they’ve lost the ability to convince people that Treasury purchases aren’t at least partially why the Dow Jones Industrial Average is up almost 4,000 points since late…

LAGOS (Capital Markets in Africa) – Central bankers in sub-Saharan Africa are likely to focus more on domestic factors than global developments when they decide on interest rates in the next two weeks. Most will likely opt to pause. Since the monetary policy committees of some of the region’s key economies last met, data showed that South Africa’s economy contracted in the third quarter, Nigerian food inflation quickened due to border closures and in Ghana,…

LONDON (Capital Markets in Africa) – Pound traders piling into bets on an interest-rate cut this month are getting a warning from strategists preaching the virtue of patience. Bank of New York Mellon and Nomura International are calling for calm after the market became the most aggressive on an imminent rate cut from the Bank of England since 2016, pricing in a more than 60% chance. They recommend waiting for more evidence of the economic…

JOHANNESBURG (Capital Markets in Africa) -Two months can be a long time in central banking, and if you are the South African Reserve Bank it can mean bringing an interest rate cut forward and a move to signaling even more. The Reserve Bank’s monetary policy committee unexpectedly cut its key rate to 6.25% from 6.5% on Thursday, a move predicted by only three of the 19 economists surveyed by Bloomberg. These charts show how the…

LONDON (Capital Markets in Africa) – The path to a Bank of England interest-rate cut as soon as this month became clearer on Wednesday after inflation unexpectedly slowed to a three-year low. The pound fell and traders increased bets that policymakers would reduce rates on Jan. 30, as the shock reading reinforced speculation fueled by dovish comments from BOE Governor Mark Carney and others in recent days. Less than an hour earlier, policymaker Michael Saunders, who’s been…

LONDON (Capital Markets in Africa) – The Bank of England’s dovish shift in the past week has already rippled through markets, and now economists are starting to react too. NatWest Markets, a division of Royal Bank of Scotland Group Plc, changed its interest-rate forecast and now sees a cut to 0.5% from 0.75% at this month’s meeting. Economist Ross Walker sees a second reduction later in the year, having previously predicted no move by the BOE at…

JOHANNESBURG (Capital Markets in Africa) – South Africa must move quickly to implement the reforms needed to salvage its status as an investment destination and breathe life into the struggling economy. “SA is rapidly becoming a forgotten country and has stopped being talked about as an investment destination,” James Formby, the chief executive officer of FirstRand Ltd.’s Rand Merchant Bank, wrote in Johannesburg-based newspaper Business Day. “It’s no longer five to midnight, it is midnight. We cannot…