Overseas Headlines – October 12, 2021

United States:

IMF Trims View on Growth Rebound as ‘Dangerous Divergence’ Seen

“The International Monetary Fund expressed concern the global economic recovery has lost momentum and become increasingly divided, even as it stuck by its prediction for a robust rebound from the Covid-19 recession. The Washington-based lender now expects output to expand 5.9% worldwide this year, down 0.1 percentage point from what it anticipated in July and a bounce from the 3.1% contraction of 2020, it said on Tuesday in its latest World Economic Outlook. It held the forecast for 2022 at 4.9%.”



ECB May Need PEPP Flexibility for Future Stimulus, Villeroy Says

“The European Central Bank should consider keeping some of the flexibility of its pandemic bond-buying program for future asset purchases, according to Governing Council member Francois Villeroy de Galhau. With inflation still seen falling short of the 2% target in the medium term, monetary policy will remain very accommodative even after the likely end of the 1.85 trillion-euro ($2.14 trillion) emergency scheme — known as PEPP — in March, the Bank of France governor said in a video speech to a conference.”



Bank of Korea Considers Timing of Next Hike After Standing Pat

“Bank of Korea Governor Lee Ju-yeol gave his strongest signal yet that a rate hike is likely in the works for November as he flagged worsening financial imbalances, growing inflationary pressures and solid recovery momentum. The central bank’s decision to hold rates at 0.75% earlier Tuesday was opposed by two members who called for a back-to-back increase following August’s liftoff. Dissension on the board typically comes before a BOK policy move and the latest example pushed up South Korean bond yields.”




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