Archive for Financial News

Art world will help fuel Ethereum price to $500 this year

By George Prior

The art world will help drive up prices of cryptocurrency Ethereum, taking it to $500 by the end of the year, affirms an influential tech expert and business analyst.

The comments from Ian Mcleod, from Thomas Crown Art, the world’s leading art-tech agency that he established with renowned art dealer, Stephen Howes, comes as the world’s second largest cryptocurrency failed to break the $208 and $210 resistance levels against the U.S. dollar.

Mr Mcleod observes: “Ethereum’s price has been in bear territory for a few weeks, with prices declining dramatically.

“But it can be expected there will be a trend reversal between now and the end of the year.  Once back in bull territory, there will be a dramatic upswing with considerable gains.

“It would be reasonable to believe that Ethereum will hit $500 by the end of 2018 and go on an overall upward trajectory throughout 2019.”

He continues: “Much of the expected price rises will be fuelled by an increasing number of sectors including real estate, antiques and finance, using Ethereum and its superior blockchain technology.

“The art world is likely to be one of the biggest adopters as blockchain can authenticate artwork.  It’s an ideal use-case for distributed ledger technology as it offers the ability to store a permanent, immutable record of artwork at the point of creation which can be used to authenticate registered works by any party.”

He goes on to add: “Not only is Ethereum a fundamentally strong digital asset, its blockchain provides workable, tangible solutions for many sectors, it solves problems, and enhances existing systems.”

Last month, Mr Mcleod told the media: “We can expect Bitcoin to lose 50 per cent of its cryptocurrency market share to Ethereum, its nearest rival, within five years.

“Ethereum is already light years ahead of Bitcoin in everything but price – and this gap will become increasingly apparent as more and more investors jump into crypto. ”

 

 

 

RICE Analysis – Rising US exports are bullish for rice price

By IFCMarkets

Rising US exports are bullish for rice price

US export sales rose last week while crop estimate was reduced. Will the rice price continue rising?

The US Department of Agriculture cut the 2018/19 US rice crop estimate in this month’s WASDE report by 0.7 million hundredweight (cwt) to 218.8 million on lower yields. The average yield forecast was lowered 24 pounds per acre to 7,539 pounds. And rice ending stocks were lowered 0.7 million cwt to 44.2 million as no other supply and demand changes were made this month. And the weekly export sales report indicated another boost in net sales nearing a total of 58,000 MT for the last week. Increased US exports sales and reduced crop estimate are bullish for rice price.

Rice price breaches above resistance line Technical Analysis IFC Markets

On the daily timeframe the RICE: D1 has been rising after hitting 4-month low in mid-September. It has remained above the 50-day moving average MA(50) after testing it and has breached above the resistance line.

  • The Parabolic indicator has formed a buy signal.
  • The Donchian channel indicates no trend yet: it is flat.
  • The MACD indicator gives a bullish signal: it is above the signal line and the gap is widening.
  • The Stochastic oscillator has breached into the overbought zone, this is bearish.

We expect the bullish momentum will continue after the price breaches above the upper Donchian bound at 11.149. A price above that level can be used as an entry point for a pending order to buy. The stop loss can be placed below the lower Donchian bound at 10.560. After placing the pending order, the stop loss is to be moved to the next fractal low, following Parabolic signals. By doing so, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (10.560) without reaching the order, we recommend canceling the order: the market sustains internal changes which were not taken into account.

Technical Analysis Summary

Position Buy
Buy stop Above 11.149
Stop loss Below 10.560

Market Analysis provided by IFCMarkets

Fibonacci Retracements Analysis 19.10.2018 (BITCOIN, ETHEREUM)

Article By RoboForex.com

BTCUSD, “Bitcoin vs US Dollar”

As we can see in the H4 chart, after testing the retracement of 50.0% for the second time, BTCUSD is still being corrected. The target of this ascending impulse may be the retracement of 61.8% at 6905.00. If the instrument breaks the current low at 6091.10, the price may trade to reach the post-correctional extension area between the retracements of 138.2% and 161.8% at 5822.00 and 5656.00 respectively.

BTCUSD1
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

In the H1 chart, the pair is being corrected downwards and has already reached the retracement of 61.8%. The next target may be the retracement of 76.0% at 6262.00. The resistance level is the high at 6801.00.

BTCUSD2
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

 

ETHUSD, “Ethereum vs. US Dollar”

As we can see in the H4 chart, after finishing the ascending impulse, ETHUSD started a new pullback to the downside. If the instrument breaks the low at 184.38, the price may continue falling towards the post-correctional extension area between the retracements of 138.2% and 161.8% at 171.00 and 162.80 respectively. The resistance level is at 219.56.

ETHUSD1
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

In the H1 chart, the pair is being corrected and heading towards the retracement of 76.0% at 192.80.

ETHUSD2
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Forex Technical Analysis & Forecast 19.10.2018 (EURUSD, GBPUSD, USDCHF, USDJPY, AUDUSD, USDRUB, GOLD, BRENT)

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD is forming the second part of the descending wave; it has rebounded from 1.1520 and right now is falling towards 1.1444. Today, the pair may test 1.1475 from below and then fall with the short-term target at 1.1444. After that, the instrument may be corrected to return to 1.1520 and then resume trading inside the downtrend to reach 1.1410.

EURUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

 

GBPUSD, “Great Britain Pound vs US Dollar”

GBPUSD is forming another descending structure with the short-term target at 1.2992. Later, the market may test 1.3050 from below and then resume trading inside the downtrend to reach the first target at 1.2888.

GBPUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

 

USDCHF, “US Dollar vs Swiss Franc”

USDCHF is still moving upwards. Today, the pair may reach 0.9982. After that, the instrument may be corrected to return to 0.9910 and then resume trading inside the uptrend to reach 1.0060.

USDCHF
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

 

USDJPY, “US Dollar vs Japanese Yen”

USDJPY has broken 112.43 downwards; right now, it is still being corrected. Possibly, today the price may test 112.43 from below and then start another decline to reach 111.79, thus forming another consolidation range. If later the instrument breaks this range to the upside, the price may continue growing to reach 113.10; if to the downside – resume trading inside the downtrend with the target at 110.93.

USDJPY
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

 

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD is trading to expand the range downwards. Today, the pair may reach 0.7077. Later, the market may grow towards 0.7123 and then start another decline with the target at 0.7071.

AUDUSD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

 

USDRUB, “US Dollar vs Russian Ruble”

USDRUB is still consolidating below 65.58. Possibly, the pair may grow towards 65.95 and then form a new descending structure to reach 65.10. Later, the market may return to 65.58 to test it from below. If the instrument breaks this range to the downside, the price may resume falling with the short-term target at 64.11; if to the upside – trade upwards towards 67.04.

USDRUB
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

 

XAUUSD, “Gold vs US Dollar”

Gold is consolidating around 1226.32. If later the instrument breaks this range to the downside, the price may continue trading downwards to reach 1205.80; if to the upside – start another growth with the target at 1243.77.

GOLD
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

 

BRENT

Brent is still forming the third descending structure towards 78.55. Later, the market may grow to return to 82.22 once again and then start another decline with the first target at 77.37.

BRENT
Risk Warning: the result of previous trading operations do not guarantee the same results in the future

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

The Analytical Overview of the Main Currency Pairs on 2018.10.19

Analytics by JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.15789
  • Open: 1.14521
  • % chg. over the last day: -0.41
  • Day’s range: 1.14329 – 1.14602
  • 52 wk range: 1.0571 – 1.2557

Yesterday, the bearish sentiment was observed on the EUR/USD currency pair. The US currency was supported by positive economic data. In October, Philadelphia Fed manufacturing index counted to 22.2 and was better than the expected value of 19.7. Fed officials plan to adhere to the current monetary policy tightening. At the moment, the key support and resistance levels are: 1.14300 and 1.14600, respectively. Trading instrument has the potential for further decline. We recommend opening positions from the key levels.

Important economic reports on 19.10.2018:
  • – Existing home sales in the US at 17:00 (GMT+3:00).
EUR/USD

The price has fixed below 50 MA and 200 MA, which indicates the power of sellers.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell EUR/USD.

Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates the bearish sentiment.

Trading recommendations
  • Support levels: 1.14300, 1.14000
  • Resistance levels: 1.14600, 1.15000, 1.15400

If the price fixes below the support level of 1.14300, a further fall in the EUR/USD quotes is expected. The movement is tending to 1.14000-1.13750.

An alternative may be the correction of the EUR/USD currency pair to the level of 1.14800-1.15000.

The GBP/USD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.31509
  • Open: 1.30171
  • % chg. over the last day: -0.74
  • Day’s range: 1.30122 – 1.30383
  • 52 wk range: 1.2361 – 1.4345

There are aggressive sales on the GBP/USD currency pair. The British pound weakened significantly against the US dollar due to weak retail sales statistics. The key support and resistance levels are: 1.30000 and 1.30400, respectively. Positions should be opened from these marks. Trading instrument has the potential for further decline.

We recommend paying attention to the speech by the Bank of England governor.

GBP/USD

The price has fixed below 50 MA and 200 MA, which indicates the power of sellers.

The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell GBP/USD.

Stochastic Oscillator is in the neutral zone, the %K line is crossing the %D line. There are no accurate signals.

Trading recommendations
  • Support levels: 1.30000, 1.29700
  • Resistance levels: 1.30400, 1.30800, 1.31200

If the price fixes below the round level of 1.30000, a further decrease in the GBP/USD quotes is expected. The movement is tending to 1.29700-1.29500.

An alternative may be the GBP/USD currency pair growth to the level of 1.30750-1.31000.

The USD/CAD currency pair

Technical indicators of the currency pair:
  • Prev Open: 1.29915
  • Open: 1.30833
  • % chg. over the last day: +0.47
  • Day’s range: 1.30536 – 1.30666
  • 52 wk range: 1.2059 – 1.3795

The USD/CAD currency pair moved away from monthly highs. At the moment, the technical pattern is ambiguous. Local support and resistance levels are: 1.30400 and 1.30650, respectively. Positions should be opened from these marks. In the near future, correction of the USD/CAD quotes is not excluded after a prolonged growth.

The news feed on 19.10.2018:
  • – Reports on inflation and retail sales in Canada at 15:30 (GMT+3:00).
USD/CAD

Indicators point to the power of buyers: the price is above 50 MA and 200 MA.

The MACD histogram is in the positive zone, but below the signal line, which gives a weak signal to buy USD/CAD.

Stochastic Oscillator is moving out of the oversold zone, the %K line is above the %D line, which indicates the bullish sentiment.

Trading recommendations
  • Support levels: 1.30400, 1.30100, 1.29800
  • Resistance levels: 1.30650, 1.30850, 1.31000

If the price fixes below the local support of 1.30400, it is necessary to look for entry points to the market to open short positions. The target movement level is 1.30100-1.29800.

Alternative option. If the price fixes above the resistance of 1.30650, the USD/CAD quotes growth is expected. The movement is tending to the round level of 1.31000.

The USD/JPY currency pair

Technical indicators of the currency pair:
  • Prev Open: 112.131
  • Open: 111.767
  • % chg. over the last day: -0.33
  • Day’s range: 112.089 – 112.129
  • 52 wk range: 104.56 – 114.74

There is a variety of trends on the USD/JPY currency pair. Investors expect additional drivers. At the moment, local support and resistance levels are: 112.300 and 112.550, respectively. Positions should be opened from these marks. We recommend paying attention to the US government bonds yield.

Publication of important economic reports from Japan is not planned.

USD/JPY

Indicators do not send accurate signals: 50 MA is crossing 200 MA.

The MACD histogram is near the 0 mark.

Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates the bearish sentiment.

Trading recommendations
  • Support levels: 112.300, 112.000, 111.700
  • Resistance levels: 112.550, 112.850

If the price fixes above the resistance level of 112.550, the USD/JPY quotes growth is expected. The movement is tending to 113.000-113.250.

Alternative option. If the price fixes below 112.300, we recommend looking for entry points to the market to open short positions. The target movement level is 112.000-111.700.

Analytics by JustForex

The US Dollar Is in the Positive Zone

by JustForex

Demand for the US currency is still high. Yesterday, the US dollar strengthened against a basket of major currencies. The dollar index (#DX) again updated the weekly high and closed in the positive zone (+0.44%). Positive economic reports and the prospects for the Fed interest rates raising support the US currency. In October, Philadelphia Fed manufacturing index counted to 22.2 and was better than the expected value of 19.7. Today, we expect important statistics from Canada and the United States.

The British pound weakened significantly against the US dollar due to weak economic statistics from the UK. The volume of retail sales in the UK fell by 0.8% in September. Experts expected a decline of 0.4%. Yesterday, the Brexit summit of EU leaders was held, during which no agreement was reached on the exit of the United Kingdom from the Union. However, British Prime Minister, Theresa May, is ready to consider the possibility of extending the transition period during which to adhere to the current EU rules.

Today, during the Asian trading session, weak data on the economy of China have been published. Thus, the GDP indicator (y/y) slowed down to 6.5%, while experts expected 6.6%. Industrial output increased by 5.8% in September, which is below market expectations at the level of 6.0%.

Oil quotes have become stable. At the moment, futures for the WTI crude oil are testing a mark of $68.80 per barrel.

Market Indicators

Major US stock indices show negative dynamics: #SPY (-1.44%), #DIA (-1.28%), #QQQ (-2.32%).

At the moment, the 10-year US government bonds yield is at the level of 3.17-3.18%.

Important economic reports on 19.10.2018:

– Reports on inflation and retail sales in Canada at 15:30 (GMT+3:00);
– Existing home sales in the US at 17:00 (GMT+3:00).

We also recommend paying attention to the speech by the Bank of England governor Carney.

by JustForex

EURUSD: external forces putting pressure on the euro

By Matthew Anthony, Alpari

Previous:

Italian budget woes, US and Italian government bond yields, Brexit, and expectations of further Fed rate hikes have the Forex market on edge.

High volatility on EURUSD persisted throughout the day. The overall strengthening of the US dollar and problems in the EU sent the euro to 1.1449.

The European Commission rejected Italy’s draft budget for 2019. EU leaders said the Brexit transition period could be extended. ECB Head Mario Draghi believes that Brexit’s influence on the economy will be limited. In addition, the dollar continues to receive support from the FOMC minutes published on Wednesday.

Day’s news (GMT+3):

  • 11:00 Eurozone: current account n.s.a. (Aug).
  • 11:30 UK: public sector net borrowing (Sep).
  • 15:30 Canada: CPI (Sep), retail sales (Aug).
  • 17:00 US: existing home sales change (Sep).
  • 19:00 US: FOMC Member Bostic speech.
  • 19:10 UK: BOE’s Governor Carney speech.
  • 20:00 US: Baker Hughes US oil rig count.

Fig 1. EURUSD hourly chart.

Current situation:

The price is bouncing through the Gann levels like a ball down the stairs. It rose from the 112th degree to 1.1527. Buyers could not immediately gain a foothold above 1.1500. In the US session, they returned to 1.1518, but were again thrown back. Then they began to close long positions, which accelerated the fall below 112 degrees, to 1.1449. The fall continued after 11 hours of correction.

The price is falling in the form of a complex wave structure. According to this, the market still has to form a downward impulse to form a double bullish divergence. If sellers demolish 1.14, then we can forget about the one divergence which formed, and prepare for the euro to weaken to 1.1370.

Global stocks gripped by risk aversion, China GDP disappoints

Article by ForexTime

It has been a turbulent trading week for stock markets as trade worries, global growth fears, Italian budget concerns and geopolitical tensions led to a deterioration in risk sentiment.

Although global equity bulls made an appearance mid-week thanks to upbeat US corporate earnings, this was short-lived after hawkish Federal Reserve minutes reinforced expectations of higher US interest rates. With geopolitical risks likely to promote risk aversion, investors should fasten their seat belts as global stocks may have more instore for a rough and rocky ride downhill.

Asian shares were mostly mixed this morning after China’s GDP growth for the third quarter of 2018 printed below market expectations. The risk-off vibe from Asian markets could infect European shares this morning and trickle back down into Wall Street later in the afternoon.

China’s GDP slows to 6.5% in Q3

Sentiment towards the world’s second largest economy was dealt a blow this morning following reports that growth slowed to its weakest pace since the global financial crisis during the third quarter.

China’s GDP growth came in at 6.5% in Q3, slower than the 6.7% recorded in Q2 as trade tensions with the United States weighed on the economy. With the growth outlook for China looking discouraging as US tariffs take effect, this is certainly bad news for emerging markets – especially those with a strong economic reliance on the nation. When China sneezes, it is not only emerging markets that will catch a cold but the rest of the world. Further signs of a slowdown in economic momentum is likely to compound risk aversion, ultimately impacting global sentiment.

Turkish Lira star of the show in EM currency space

It has been a positive trading week for the Turkish Lira which has gained 2.88% against the Dollar since Monday. Easing tensions between the United States and Turkey following the release of American pastor Andrew Brunson could be a likely factor behind the Lira’s appreciation. While optimism over the US lifting some sanctions on Tukey is good news for the Lira, the upside remains capped by external factors in the form of Dollar strength and trade tensions. In regards to the technical picture, the USDTYR has the potential to trade towards 5.45 if a weekly close under 5.60 is achieved.

Currency spotlight – EURUSD

The uncertainty revolving around Italy’s controversial budget plans coupled with Brexit developments have weighed heavily on the Euro this week. An appreciating Dollar rubbed salt into the wound with the EURUSD sinking towards 1.1440 on Friday morning. The EURUSD has been on the back foot for the most part of this trading week and is likely to sink lower in the near term if a weekly close below 1.1480 is achieved. Repeated weakness under 1.1480 may open a path towards 1.1420 and 1.1380.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.


Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

US stock market extends losses

By IFCMarkets

Dollar strengthening slows

US stocks pullback deepened on Thursday as prospect of continued tightening weighed on market sentiment after hawkish Fed minutes. The S&P 500 dropped 1.4% to 2768.78. Dow Jones industrial average fell 1.3% to 25379.45. The Nasdaqcomposite lost 2.1% to 7485.14. The dollar strengthening slowed as initial jobless claims fell to 49-year lows while the Philadelphia Fed manufacturing index for October came in slightly below last month’s reading: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, gained 0.3% to 95.919 but is lower currently. Futures on stock indices point to higher openings today.

European indices open mixed

European stocks extended losses on Thursday despite positive earnings reports. Both the EUR/USD and GBP/USDcontinued falling, with GBP/USD rising currently while EUR/USD still lower. The Stoxx Europe 600 index lost 0.5%. Germany’s DAX 30 dropped 1.1% to 11589.21. France’s CAC 40 slid 0.6% and UK’s FTSE 100 slipped 0.4% to 7026.99. Markets opened mixed today.

Chinese stocks rebound

Asian stock indices are mixed today as Chinese stocks rallied paring earlier losses after lower than expected GDP growth. China’s gross domestic product grew 6.5% in the third quarter from the same quarter a year earlier when a 6.6% growth was expected: the Shanghai Composite Index is 2.6% higher and Hong Kong’s Hang Seng Index is up 0.5%. Nikkei however lost 0.6% to 22532.08 despite resumed yen weakness against the dollar. Australia’s All Ordinaries Index slipped 0.1% while Australian dollar turned higher against the greenback.

NIKKEI tests support line 10/19/2018 Market Overview IFCM Markets chart

Brent advances

Brent futures prices are gaining today on expected rise in Chinese demand for crude as state-owned Chinese refiners return to service after maintenance. Prices ended lower yesterday after a report US domestic crude inventories rose sharply last week – 6.5 million barrels. Brent for December settlement closed 1% lower at $79.29 a barrel on Thursday.

Market Analysis provided by IFCMarkets

Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

Chile raises rate 25 bps so inflation stays around target

By CentralBankNews.info
     Chile’s central bank raised its monetary policy rate by 25 basis points to 2.75 percent, saying the “board believes that the monetary stimulus should begin to be reduced to ensure that inflation perspectives remain close to the target.”
      It is the first rate hike by the Central Bank of Chile since December 2015 when the rate was raised to 3.50 percent to rein in inflation, boosted by the fall in the peso’s exchange rate.
      Beginning in January 2017 the central bank then began cutting the rate as inflation eased and in four quick steps it sliced 100 basis points of the key rate, wrapping up its easing cycle by May 2017.
      Since then the rate has been kept stable but beginning in June the board has been considering withdrawing monetary stimulus. Minutes from the September meeting showed committee members had considered raising the rate before deciding unanimously to maintain it.
      Today’s decision, which was unanimous by the board, reflected the recent narrowing of the output gaps in recent quarters and the expectation that this will continue so inflation will be around 3.0 percent in coming quarters, the bank’s target.
      The central bank said it expects the monetary policy rate to converge to its neutral level by 2020 and beginning this process in a timely manner would allow a tightening to be gradual and cautious.
      Chile’s inflation rate rose to 3.1 percent in September from 2.6 percent in August, with investment in machinery and equipment continuing to boost domestic spending, with durable consumption also strong.
       Business expectations are also optimistic while household expectations have ease in recent months and are below their neutral threshold, the central bank said.
       Chile’s peso firmed steadily for two years beginning in January 2016 but since February this year it has depreciated, like most emerging market currencies.
       In the last week the peso has risen as investors looked for tighter monetary policy and today the peso was trading at 676.2 to the U.S. dollar, down almost 9 percent this year.

   
     The Central Bank of Chile issued the following press release:

“In its monetary policy meeting, the Board of the Central Bank of Chile decided to raise the monetary policy interest rate by 25 basis points to 2.75%. The decision was adopted by the unanimous vote of its members.
The external scenario continues to be characterized by financial markets’ volatility, in a context of increasing divergence of the US economy from its peers in the developed world. At the same time, trade tensions have tended to focus on US-China relations. The Federal Reserve raised its benchmark rate again in September, while the market adjusted upward the expected trajectory for 2019 and 2020. This pushed long-term interest rates and risk aversion up in most of the countries, and the prices of riskier assets saw important corrections at the global level. In the Eurozone, Brexit negotiations and the definition of Italy’s fiscal deficit have created uncertainty in markets. In turn, China increased the monetary impulse once more, while its currency continued to depreciate against the dollar. Financial pressures on the rest of the emerging economies have tended to moderate. Commodity prices, although with important ups and downs, have seen increases in most products, copper included.

Chile’s currency and stock prices, as in most emerging economies, saw significant fluctuations in recent weeks. In the domestic fixed-income market, worth noting was the rise of short-term rates in line with expectations about the MPR. Meanwhile, longterm rates have had limited increases, smaller than those of their external peers, in a context where the country’s financial risk indicators remained contained. Domestic credit continues to be characterized by low interest rates and stronger growth in commercial loans. The Bank Credit Survey for the third quarter of 2018 showed less restrictions for granting loans to households and big companies and stronger demand in the different segments, especially households, big companies and real estate.

Mining activity had some setbacks owing to some specific factors in some mines. The other sectors evolved as foreseen in the September Monetary Policy Report. Investment, especially in machinery and equipment, continues to lead the increase in domestic spending. The good performance of durable consumption also stands out. The review of complementary sources of information on the labor market -including administrative records- indicates increased dynamism of employment and salaries than suggested by the surveys. Corporate expectations (IMCE) are still in the optimistic zone, while household expectations (IPEC) have relapsed somewhat in recent months and now stand slightly below their neutral threshold. Anyway, expectations about the economic situation of households one year ahead are still positive. For the period 2018-2020, the markets’ outlook for GDP growth (EES) is consistent with the baseline scenario of the latest Report.

September’s inflation (0.3%) was slightly below projections, affected by one-off developments, such as lower food inflation. With this, annual CPI inflation rose to 3.1% and CPIEFE inflation rose to 2.1%, with a sustained acceleration of the more outputgap sensitive prices, such as the non-regulated services in the CPIEFE basket. Private expectations for inflation remain around 3% for December of this year and for one and two years ahead.

The Board’s decision considered that capacity gaps have narrowed in recent quarters and will continue to do so in line with forecasts in the Monetary Policy Report, taking both headline and core inflation near 3% in the coming quarters. In this scenario, the Board believes that the monetary stimulus should begin to be reduced to ensure that inflation perspectives remain close to the target. Bearing in mind that, in the baseline scenario of the Report, the monetary policy rate will converge to its neutral level in 2020, a timely start of this process allows proceeding with graduality and caution. This will provide the necessary room for the Board to define the appropriate pace of the monetary stimulus withdrawal. Thus, the Board reaffirms its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the twoyear horizon.

The minutes of this Monetary Policy Meeting will be published at 8:30 hours of Tuesday 6 November 2018. The next Monetary Policy Meeting is scheduled to take place on Tuesday 4 December 2018 and the statement thereof will be released the same day at 18:00 hours. “

     www.CentralBankNews.info