Friday, December 3

What is said at the tables: noises from the reserves, “tapering”, and the agreement with the IMF


From the Fund, for all tastes, but under a common denominator, no one envisions a long-term or soon-to-be agreement. Yes, before March. There is no margin. Unless Putin or Xi “donate” some SDR in exchange for “chi lo sa”. And speaking of reservations, there was a Kirchner who stood out these days. It was Markus – perhaps a distant relative, “chi lo sa” – who, together with other economists from central banks in the region, excelled in a debate on economic policies for recovery organized by CAF. Markus Kirchner is the manager of macroeconomic analysis at the Central Bank of Chile and questioned the transitory nature of inflation in some countries in the region. And he provided a piece of information about the passthrough in Chile to take into account: in the case of a shock of external and multilateral origin, the passthrough is less than if it is idiosyncratic.

In the first case, a devaluation of 10% implies an increase in inflation of 0.5% to one year, while in the second it would be 2.5%, that is, the transfer of devaluation to prices would be 35% . It is enough to imagine in the current Creole situation what would happen with a disruptive jump in the nominal exchange rate, some participants at the event asked fearfully.

Despite having already been discounted and even formally announced the “tapering” (the Fed’s QE will end in June), it follows the dente in the market talks, which adjusted its forecast on US interest rates. Chicago currency trader pointed out to colleagues the data that emerges from the futures on CME Group’s fed funds: the consensus gives a 47% chance of a rate hike in June 2022 and a 13% chance that there will be two hikes for That date.

This means that the Fed could accelerate the reduction of its purchases if inflation is high (as it pointed out in its statement) to raise rates even earlier than the market expects. And as Robin Brooks (IIF chief economist) warned him to prove what was happening in global markets, in the run-up to the announcement of the tapering, since the Fed meeting on September 22, a pan on the currency war. Since 22-S, for example, Brazil has risen 250 basis points and yet the real has fallen almost as much as the Turkish lira, where the central bank, to the total surprise of the markets, cut interest rates by 300 basis points. It is well worth looking at the table that accompanies the section today.

Who is still being talked about is also the token inspired by The Squid Game, Squid, which again showed increases of 700%, despite having collapsed days ago. The largest cryptocurrency exchange in the world, Binance, initiated an investigation into this alcoin to track the funds associated with the movement of this crypto.



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