The European Central Bank and the Bank of Canada in June joined the ranks of big central banks easing policy, while emerging markets ploughed ahead in their quest to lower interest rates, Reuters reported. Three of the nine central banks overseeing the 10 most heavily traded currencies that held meetings in June reduced their lending benchmarks, with Switzerland delivering its second rate cut in this cycle.
Resources Per Country
- Anguilla
- Bahamas
- Barbados
- Belize
- Bermuda
- British Virgin Islands
- Canada
- Cayman Islands
- Costa Rica
- Cuba
- Dominica
- Dominican Republic
- El Salvador
- Grenada
- Guadeloupe
- Guatemala
- Haiti
- Honduras
- Jamaica
- Mexico
- Montserrat
- Netherlands Antilles
- Nicaragua
- Panama
- Puerto Rico
- Saint Kitts and Nevis
- Saint Lucia
- Trinidad and Tobago
- Turks and Caicos Islands
- United States
- United States Virgin Islands
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Global policymakers aren’t about to let the Federal Reserve’s delay in cutting interest rates distract them too much from their own easing efforts, Bloomberg reported. Among the 23 of the world’s top central banks featured in Bloomberg’s quarterly guide, only the Bank of Japan won’t end up lowering borrowing costs within the next 18 months. Most are already set to do so this year. In total, 155 basis points will be removed from an aggregate benchmark global rate compiled by Bloomberg Economics by the end of 2025.
The International Monetary Fund said Thursday that the US is running deficits that are too big and is weighed down by too much debt, and it warned of dangers from increasingly aggressive trade policies, Bloomberg News reported. While calling the world’s largest economy “robust, dynamic and adaptable,” the fund leveled unusually harsh criticism toward the US, its biggest shareholder. It also slightly downgraded its estimate for growth this year to 2.6%, down 0.1 percentage point from its April forecast.
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Mexico kept borrowing costs unchanged near a record high Thursday, as the combination of still rising consumer prices and peso volatility sidelined the central bank for a second straight meeting, Bloomberg News reported. Banxico, as the central bank is known, held the key rate at 11% in a decision that had been forecast by 25 of 27 analysts surveyed by Bloomberg. It was a split decision, with deputy Governor Omar Mejia voting for a quarter-point cut with the other four members of the board voting in favor of the hold.
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Bank of Canada Governor Tiff Macklem said the country’s economy is headed for a soft landing, suggesting the central bank expects the unemployment rate to rise but that a large increase isn’t needed to achieve the inflation target, Bloomberg News reported. On Monday, Macklem said Canada’s unemployment rate — which hit 6.2% in May — was “just above” pre-pandemic levels, when the labor market was close to “maximum sustainable employment” — the highest level of jobs an economy can have without stoking inflation.
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Mexico’s inflation accelerated more than expected in early June to move further above the central bank’s target, likely cementing a second straight pause by Banco de Mexico at its Thursday rate meeting, Bloomberg News reported. Consumer prices rose 4.78% in the first two weeks of the month from a year earlier, above the 4.73% median estimate of analysts in a Bloomberg survey and up from the 4.59% increase in the prior two-week period.
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Inflation unexpectedly surged in Canada, a setback for policymakers as they weigh further interest rate cuts next month, Bloomberg News reported. The consumer price index rose 2.9% in May from a year ago, up from 2.7% a month earlier, primarily due to higher prices for services, Statistics Canada reported Tuesday in Ottawa. On a monthly basis, the index climbed 0.6%, versus expectations for a 0.3% gain and up from 0.5% in April. On a seasonally adjusted basis, inflation rose 0.3%.
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Businesses failed to remit to Ottawa billions of dollars in sales taxes they had collected from customers last year, new data shows, indicating financial difficulties as those companies are unable to keep up with their invoices, the Globe and Mail reported. The Canada Revenue Agency says there was $19.4 billion in GST and HST debt outstanding as of March 31, an increase of $3.2 billion from a year ago and double what it was before the COVID-19 pandemic. That’s the largest single-year figure in CRA data, which goes back a decade.
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The head of the Securities and Exchange Commission is encouraging the UK and others to shorten the settlement time for currency trading to better align their markets with those in Asia and North America, Bloomberg News reported. The UK is debating a transition to next-day settlement, known as T+1, for securities transactions, with its Treasury calling for the shift by the end of 2027. But SEC Chair Gary Gensler is nudging the UK to go bigger by adding more asset classes for shorter settlement. The US, Canada, Mexico and other countries already pressed ahead.
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Canadian retail sales likely dropped last month, nearly wiping out all of April’s gains and highlighting weakness in consumer spending that will keep more Bank of Canada rate cuts on the table this year, Bloomberg News reported. Receipts for retailers fell 0.6% in May, the biggest monthly decline since January, according to an advance estimate from Statistics Canada released Friday. April’s increase — the only gain in retail sales so far this year — was primarily driven by gasoline stations and fuel vendors, which likely benefited from higher prices. In volume terms, retail sales rose 0.5%.
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