U.S. Fed expected to leave rates on hold, but analysts split on whether CBE follows suit
Interest rate watch: The U.S. Federal Open Market Committee met to discuss interest rates yesterday and will make its announcement today. The market is largely anticipating the Fed to maintain rates, with Luke Bartholomew, investment manager at Aberdeen Asset Management, saying a June hike is “dead in the water.” Timothy A Duy writes for Bloomberg that a change isn’t expected until September while the FT’s Kelly Friendly opines that the “hawkish inclination of the Fed … is misguided. The greater danger is of too little rather than too much demand. A new Fed paradigm is therefore in order.”
Meanwhile the Central Bank of Egypt’s Monetary Policy Committee is due to meet on Thursday.
Analyst consensus (so far) is for a rate hike. Of the eight analysts who have made public calls on which way they think the MPC will break, four expect rate hikes, three expect the committee to leave rates on hold and two see it as even odds.
- Rate hike: EFG Hermes, Arqaam, Institute of International Finance, Prime
- On hold: Beltone, Multiples, and Pharos (more in By the Numbers).
- On the fence: CI Capital and Mubasher see there being a 50-50 chance of a 25-50 bps price bump
Over at Reuters, six out of 11 economists expect the bank to hold rates while five forecast a hike ranging from 25 bps to a full percentage point.
Also today, the local wheat buying season officially comes to an end as the government has already surpassed its set target of buying 4 mn tonnes. "Supplies Minister Khaled Hanafi pointed out that the door for receiving local wheat from farmers will close at the end of Wednesday due to lowering local procurement rates," Reuters quoted a Supply Ministry statement as saying.
When do we eat? Iftar will be at 6:58pm CLT today, while the cut-off for sohour will be at 3:08am CLT, according to Islamic Finder.