Julius Baer: Comentarios Fed, BCE y Materias Primas

Redacción - Martes, 19 de Diciembre

• 
• 
• 
• 
• • 
  • 
  • 

ECONOMICS Fed and ECB: Sticking to gradualism and predictability • Central banks in the US and the eurozone acknowledge stronger growth dynamics without fearing strong inflation dynamics, al-lowing them to stick to a gradual policy approach. • While the policy style is very similar in the US and the eurozone, the diverging direction is a good reason to expect a weaker EUR/USD.

Both the US Federal Reserve (Fed) and the European Central Bank (ECB) did their best at their meetings last week to remain gradual and predictable as far as monetary policy is concerned. The Federal Open Market Committee (FOMC) decided to increase the Fed funds target range by 25 basis points to 1.25%- 1.5%, which was well indicated ahead of the meeting. As a result, short-term money market rates moved less than two basis points last week. The FOMC outlook, which included growth, inflation and unemployment rate forecasts as well as the appropriate level of the Fed funds rate over the coming years, has been revised notably higher regarding growth, while the inflation forecast and the anticipated appropriate policy path remains largely un-changed. As a consequence, the Fed’s interest rate hike had a dovish aftertaste; it failed to lift long-term bond yields, was well digested by stock markets and did not push the US dollar markedly higher.

 

The ECB seemed to have a similar script to the Fed’s for its meeting last week. The growth projection for 2018 has been lifted considerably, while the inflation outlook remains broadly unchanged. The same applies to the monetary policy path, which earmarks a reduced volume of asset purchases from next month on and sticks to the guidance that it is far too early to define the end of the unconventional monetary policy stimulus despite an impressive growth outlook. Gradualism and predictability pre-vented EUR/USD from taking a specific direction last week, but monetary policy in the US and the eurozone are still diverging and justify a slightly stronger US dollar in the coming month.

 

David Kohl, Chief Currency Strategist, Julius Baer

 

 

*

 

COMMODITIES

 

Platinum: Political tailwinds

 

Politics have been a source of headwinds to the platinum market over the past couple of years. The inability or unwillingness of European politicians to properly address the diesel emission scandal and consumers’ related concerns triggered a massive decline in the market share of diesel-fuelled cars and weighed on platinum auto catalyst demand. Additional headwinds came from a depreciating South African rand, which lowered the platinum industry’s dollar-denominated production costs. South Africa accounts for more than 70% of global platinum mine supply. These headwinds turned into tailwinds yesterday when the rand appreciated following the African National Congress (ANC) elections, leading to a 2% rally in platinum prices. While political and economic challenges remain, we believe there is a chance for a change to the better in South Africa. A short-term stabilising or strengthening rand should support the seasonal upside we see in the platinum market. Looking back over the past 15 years, we see that prices gained 14 times in January and 11 times in February for a total median profit of more than 8%. While the persistence of this seasonal pattern is indeed surprising, there is a fundamental explanation for it: reduced supplies due to maintenance in South Africa’s platinum industry.

 

Following yesterday’s elections in South Africa, platinum’s political headwinds turned into tailwinds as an appreciating rand boosted prices. Upside should be limited by prevailing headwinds from the diesel emission scandal.

 

Carsten Menke, Commodities Research Analyst, Julius Baer

[Volver]