In their last monetary meetings of the year, the central banks exited the year with a bang.
- Bank of England decided to increase the interest rate from 0.10% to 0.25%. Which was a surprising move for the markets.
- FED Chairman Powell announced a decision to double the taper speed of their asset purchased program. The FED asset purchase program (so-called QE) will conclude at the end of March 2022 instead of June 2022. Also, the FOMC members signaled determination for three interest rate hikes in 2022.
- The European Central Bank announced that it will, increase its asset purchase program after the end of the PEPP program. Which is their Pandemic emergency purchase program. Members of the ECB are calling the rising inflation in the EU a transitionary.
- The People’s Bank of China lowered the one-year loan prime rate to 3.8%, down from 3.85%. The Chinese government is trying to manage and ease the consequences of the potential default of the biggest property firm Evergrande.
- Reserve Bank of New Zealand increased the interest rate from 0.50% to 0.75%.
How much the current COV19 wave will slow down the economy in the EU, UK, and the US? What will be the damages of the property’s crisis for the Chinese economy? Can the FOMC members manage the rising inflation in the US? Can the US economy continues roaring without the support of the FED and the policymakers? These are the questions for the economists to answer and help the investors to navigate the financial markets. We, will continue analyzing the charts and take short, medium, and long-term decisions based on technical analysis.
Merry Christmas and Happy New Year! We wish you good health, and may your plans come true.