INSUBCONTINENT EXCLUSIVE:
By Michelle Jamrisko and Samuel PotterBilled as the most important week of the year for the global economy, central banks provided insight
into the outlook for monetary policy through the rest of 2018 and beyond and putting a clear stamp on financial markets.
The Federal Reserve
raised interest rates, the European Central Bank said it would stop bond buying in December and the Bank of Japan kept stimulating
hiking.
The policy makers acted as economic data disappointed in many regions outside of the United States and International Monetary Fund
Friday.
Investors reacted to all the events by sending the dollar to its largest weekly gain since 2016 while keeping pressure on emerging
week:
The Federal ReserveThe Fed delivered on a widely anticipated 25-basis-point interest-rate hike Wednesday
It also took the opportunity to turn more hawkish with policy makers now forecasting four increases this year rather than the three
press conferences after every policy meeting instead of every other
spike in the dollar and 10-year Treasury yield soon faded, but the greenback gathered steam when central banks in both Europe and China
signaled more dovish outlooks
Powell about the resilience of the economy to increased tightening.European Central BankPresident Mario Draghi pulled off the rare feat of
proving both hawkish and dovish
He announced that the ECB would end its crisis-fighting quantitative easing program in December, yet also said it expects interest rates to
remain unchanged at least through the summer of 2019
most at risk from an end to QE
Stocks posted the biggest jump since April.Japan, ChinaFalling further behind its main counterparts, the Bank of Japan left its quantitative
easing program in place and downgraded its assessment of inflation
The BOJ maintained the settings on its yield-curve control program and asset purchases, but now sees the core consumer price index in a
range of 0.5 percent to 1 percent, from around 1 percent previously
BOJ Governor Haruhiko Kuroda said Friday that a stronger yen and cheaper accommodation prices had weighed on inflation, but momentum toward
borrowing costs after the Fed
decision not to follow the Fed signaled growth concerns that are shared by investors
Combined with the threat of United States tariffs, it sent the Shanghai Composite Index of shares to the lowest since September 2016
Rest of the WorldArgentina may have dealt the biggest shock to markets as its government named a new central bank chief as the peso kept
falling despite the IMF ladling out the biggest loan in its history
The Reserve Bank of Australia will remain on hold for a good while amid a global puzzle on sluggish wage growth, according to chief Philip
Czech policy makers are readying themselves to resume raising borrowing costs earlier than planned
Norway might have to curb tightening plans if inflation continues to disappoint, but Sweden may need to act
Elsewhere, faster inflation in India has investors on watch for a rate hike and Pakistan devalued its currency for the third time since
Chile signaled a rate increase by the end of the year, while Russia, Iceland, Uganda and Namibia left rates on hold.
Chart of The Week
