China's Central Bank Chief Says End to Deposit-Rate Cap Is Close
(Bloomberg) -- China's central bank is pushing ahead with plans to liberalize interest rates even as the economy slows, a reform that would effectively end a dual-track rate system that has seen savers subsidize decades of investment-fueled growth.
Removal of a cap on what banks can pay depositors over the benchmark rate is "very close," People's Bank of China Governor Zhou Xiaochuan said Thursday at a press conference in Beijing at the National People's Congress. "If there is a chance this year, the deposit-rate ceiling will be lifted, and the last step that people have been expecting will be made," Zhou said. "The probability is very high," he said.
Euro sell-off pauses; parity with dollar view intact
(Reuters) - The euro rose against the dollar for the first time in two weeks on Thursday, recovering from a 12-year low struck earlier in the day, as a sustained sell-off in single currency paused for breath.
But traders said gains would be limited with investors looking to sell the euro at higher levels. Both technical indicators and options market pricing EURVOL= showed more losses are in store for the beleaguered currency which has hit a 13-year against a basket of currencies. EURREER=ECBF
The one trillion euro bond-buying program the European Central Bank launched on Monday has dented the euro's appeal by driving yields of many euro zone bonds deeper into negative territory and others to all-time lows. A 30-year German bond DE30YT=RR now offers a yield which is below a two-year U.S. Treasury note US2YT=RR.
Bank of Japan wages PR campaign to prepare markets for inflation slowdown
(Reuters) - Bank of Japan policymakers are sending a concerted signal to investors that they see no need to expand their already-massive monetary stimulus for a second time in response to a slowdown in inflation driven by the fall in oil prices.
Six of the BOJ's nine board members, including Governor Haruhiko Kuroda, went public in the past two weeks to push the message that, while they expect inflation to grind to a halt or even fall in coming months, they remain hopeful that a pick-up in consumption will rekindle consumer prices down the line.
While there was an element of coincidence in the cramming of the events, the fact the fragmented board is speaking with a single voice suggests a carefully-prepared campaign to correct market misconceptions that a temporary slowdown in inflation alone could trigger more monetary firepower.