Australia Policy Potency Sharpens as Iron Ore, Jobs Cut Deficit
Apr 23 2021, 6:38 AM
April 23 2021, 12:30 AM
April 23 2021, 6:38 AM
(Bloomberg)
(Bloomberg)
The Australian central bankâs bond-buying program is set to become more influential as 10-year high iron ore prices combined with a hiring spree narrow the budget deficit and reduce government debt financing needs.
Iron ore was trading over $180 a ton this week, reflecting Chinaâs massive demand as its economy leads the global recovery from Covid-19. The Australian government based its revenue projections on expectations prices would to fall to $55 a ton by the end of September. Unemployment was expected to average 7.25% over the fiscal year, yet in March it had already fallen to 5.6%.
Inflation forces Bank of Canada s hand ahead of Fed and ECB bnnbloomberg.ca - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from bnnbloomberg.ca Daily Mail and Mail on Sunday newspapers.
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The Bank of Canada sent out a warning to investors this week that inflation still matters.
In a surprise move, it accelerated the timetable for a possible interest-rate increase and began paring back its bond purchases on Wednesday. That made Canada the first major economy to signal its intent to reduce emergency levels of monetary stimulus.
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It’s a turn in policy by Governor Tiff Macklem that shows there’s a limit to how much he’s willing to test the upper boundaries of inflation, with new forecasts showing the central bank expects the biggest persistent overshoot of its 2 per cent target in at least two decades. The question is whether Canada’s situation is unique, or foreshadowing the start of a global exit from stimulus.
Australia’s Stimulus Debate Gets a Jolt From Canada’s Taper
Bloomberg 1 hr ago Michael Heath and Ruth Carson
(Bloomberg) The Bank of Canada’s move to scale back debt purchases may fuel debate on whether its Australian counterpart is certain to extend its yield-curve control and announce a third round of quantitative easing.
Governor Tiff Macklem is scaling back purchases of Canadian government debt by a quarter and accelerating the timetable for a possible interest-rate increase at a time when Australia’s economy is arguably outperforming its North American peer. Reserve Bank of Australia Governor Philip Lowe will have a close eye on developments in Ottawa while he awaits a pickup in consumer prices and wages at home.
Inflation forces the Bank of Canada s hand ahead of Fed and ECB bnnbloomberg.ca - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from bnnbloomberg.ca Daily Mail and Mail on Sunday newspapers.