Trump Complains Again About Fed, Calling Rates ‘Rapidly Raised’

Federal Reserve is flexible and aware of risks says Powell

Federal Reserve is flexible and aware of risks says Powell

A USA delegation is in Beijing for trade talks with Chinese officials, the first face-to-face encounter since Trump and Xi agreed to a temporary truce on december 1.Wednesday sees the release of minutes from the Fed's december 18-19 policy meeting. This, along with a 100 basis point cut in China's bank reserve requirement ratios and comments from Fed Chair Jerome Powell that the USA central bank would be flexible in its approach in 2019, has been the main driver for the recovery.

Despite the strength, Federal Reserve Chairman Jerome Powell sought to ease market concerns about the risk of a slowdown, saying the central bank would be patient and flexible in policy decisions this year. It dipped 0.1 per cent against the yen and eased marginally versus the euro and sterling in early Asian trade.

Silver was steady at $15.69 per ounce, while platinum fell 0.7 percent to $816.71, having touched a more than one-month high of $831.10 earlier in the session.

"Market sentiment has improved", said Gao Qi, a strategist at Scotiabank.

Financial markets have been rattled by heightened worries about slowing global growth, especially in the United States and China, though data on Friday showed strong USA job growth.

Last week, amid intense pressure from U.S. policymakers including the United States president Donald Trump, the USA central had to step away from its much-debated monetary policy and interest rate hike, despite the inflation target had been closer to central bank's target (1.90 percent while the target was 2 percent).

The dollar outperformed other currencies in 2018 due to the Fed being the only major central bank to hike rates.

However, few analysts still see scope for the Fed to raise rated in 2019.

Analysts at Bank of America Merrill Lynch noted global equity markets had lost $19.9 trillion since January previous year, and a record $84 billion had flowed out of stocks in just the past six weeks.

Expectations of no further rate hikes this year is likely to keep the greenback under pressure.

After a slew of weaker-than-expected manufacturing data, Chinese authorities on Friday cut reserve requirements for all banks by 100 basis points. It rallied 2.1% Friday ahead of a well-flagged move by the People's Bank of China to add a net 800 billion yuan ($116.48 billion) of liquidity into the banking system by cutting banks' reserve requirements.

USA futures climbed, signaling Friday's rally in US stocks could continue, and European futures also rose.

Analysts expect further monetary stimulus from Beijing in 2019. USA gold futures gained 0.6 percent to $1,293.90 per ounce.

Oil prices edged higher on Monday, rebounding further from 1-1/2-year lows reached in December, on support from OPEC production cuts and steadying equities markets.

The two sides have until March 1 to make a deal, after which Trump has pledged to ramp up tariffs to 25 percent, from 10 percent, on $200 billion worth of Chinese imports.

And the gains filtered through to Asia, where Tokyo's Nikkei ended 2.4 percent higher, while Sydney gained 1.1 percent and Seoul jumped 1.3 percent.

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