Bank of Korea keeps rates on hold for third straight time; Asian markets mixed

South Korea’s central bank expected to start cutting rates early next year, says Deutsche Bank

Juliana Lee, head of Asia-Pacific economic research at Deutsche Bank, said the Bank of Korea is expected to start cutting its benchmark interest rate early next year.

Lee added that she expects the central bank’s policy shift to occur in tandem with the Fed’s.

“There are some signs that it (exports) has bottomed out in terms of contraction, but in terms of rebound, we don’t expect it until the fourth quarter, so we are more pessimistic about growth than the central bank,” Lee told CNBC’s “Squawk Box Asia

Lee added that she expects the won to remain largely unchanged until the central bank starts cutting rates.

— Lee Ji Hye

South Korea’s central bank keeps rates unchanged for third straight time

The Bank of Korea kept its benchmark interest rate at 3.50% for the third straight time on Thursday.

The decision was in line with the consensus forecast of economists polled by Reuters, which expects the central bank to pause rate hikes.

this The central bank governor told CNBC earlier this month It was premature to discuss a rate cut, citing the country’s inflation rate remains above the Bank of Korea’s 2 percent target.

South Korea is scheduled to release its consumer price index for May next Friday.

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Indonesia expected to keep rates unchanged for third time

Bank Indonesia is expected to keep the seven-day reverse repurchase rate at 5.75%, according to economists polled by Reuters.

Economists also expect the central bank to keep its deposit facility rate at 5.00% and its lending facility rate at 6.50%.

The move would mark the third consecutive pause by Bank Indonesia, as the country’s inflation rate topped 4% in April. The country will release its inflation rate for May next month.

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South Korea’s producer price index rises 1.6% in April

South Korea’s producer price index rose 1.6% year-on-year in April, down from a 3.3% rise in the previous month.

government data show For the month, the national producer price index fell 0.1% after rising 0.1% in March.

The PPI is a measure of changes in the prices of goods and services received by domestic producers.

The South Korean won was down 0.11 percent at 1,319.66 against the dollar on Thursday morning.

— Lee Ji Hye

Fed officials unsure if further rate hikes needed, minutes show

Fed minutes show ‘uncertainty’ Questions from participants on whether to proceed with an 11th rate hike at the June meeting.

According to the minutes, the Fed now appears to be in two camps. A group with “some” members argued that progress on reducing inflation was “unacceptably slow” and that further rate hikes were needed. The other, backed by “several” FOMC members, argued that economic growth was slowing and that “further tightening may not be warranted after this meeting.”

The minutes did not identify individual members, nor did they quantify “some” or “a few” with specific numbers. However, according to the Fed, “some” is considered more than just “a few”.

All in all, the minutes showed that the Fed will be watching the upcoming data closely to decide whether to raise interest rates again on June 14th.

— Jeff Cox, John Meloy

Correction: In Fed parlance, “some” is considered more than just “several.” An earlier version incorrectly stated the difference.

Fed’s Waller stresses ‘flexibility’ in June rate decision

Referring to a three-pronged problem facing U.S. central bankers, Fed Governor Christopher Waller said it was too early to tell which option was the right one. Data from the weeks leading up to the June 13-14 meeting will determine which path is correct, he said.

While Waller insisted the Fed needs to be “flexible” on whether it should raise rates, pause or skip June and favor a rate hike in July, he did express doubts that the central bank has gone far enough in fighting inflation. degree of need.

“I don’t think the data over the next few months will definitively show that we’ve reached terminal rates,” Waller said in prepared remarks for a speech in Santa Barbara, California.

“And I’m not in favor of pausing rate hikes unless we get clear evidence that inflation is coming down towards our 2% objective. But whether we should raise rates or not at the June meeting will depend on what happens in the next three weeks.” data,” he added.

— Jeff Cox

House Speaker McCarthy reiterates confidence in avoiding default

House Speaker Kevin McCarthy reiterates that negotiators should reach Resolution on the Debt Ceiling Even lawmakers struggled to agree on baseline spending.

“We will not default,” he told a news conference on Wednesday. “We’re going to fix this. I’m going to stick with it until we get it done. But let’s be honest. We’re having to spend less money than we did last year. It’s not my fault the Democrats can’t give up their spending.”

—Samantha Subin, Sarah Min

Negotiators reconvened Wednesday morning

Negotiators from both sides of the debt ceiling talks are expected to meet again on Wednesday morning, Reuters quoted sources familiar with the matter as saying.

Stocks fell on Tuesday after negotiators from President Joe Biden and House Speaker Kevin McCarthy appeared to make no significant progress on the day.

Reuters reported that any deal could take up to a week to be drafted and passed by Congress, raising the risk of a deal being reached just days before the Treasury Department’s June 1 default deadline.

— John Meloy

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