NAB Morning Call Is ECB rate still restrictive? Aussie employment today’s focus.
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Feb 19, 2025 Explore the European Central Bank's questioning of its interest rate policies and market reactions to central bank news. Delve into the Reserve Bank of New Zealand's unexpected rate cuts and the cautious stance of the Federal Reserve amid ongoing inflation. A significant drop in U.S. housing starts raises concerns, while all eyes are on Australia's unemployment rate, with tight expectations that could sway market reactions. Tune in for insights on how these factors intertwine with global economic trends.
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ECB Rate Restrictiveness
- European bond yields rose following ECB member Isabel Schnabel's comments.
- She questioned whether current interest rates are still restrictive, causing market speculation.
ECB Neutral Rate Uncertainty
- The ECB's neutral rate target range is between 1.75% and 2.25%.
- Schnabel's hawkish stance suggests the neutral rate may be higher than initially estimated.
UK Inflation Rise
- UK headline inflation unexpectedly increased to a 10-month high of 3% in January.
- This complicates the Bank of England's efforts to balance inflation control and economic support.