Both the IEA and the EIA released their oil demand forecasts. The former estimated oil demand to grow +0.82M bpd this year, down -0.02K bpd from last month’s forecast. The agency said that deterioration in Chinese business sentiment, European slowdown and US budget cuts would weigh on the demand for oil worldwide. As stated in the report, the IEA expects “together these three economic ‘hits’, affecting as they do the three largest economies and oil consumers, appear to further delay an elusive turnaround in global economic and in turn oil demand, growth”. The EIA released their monthly Short Term Energy Outlook with no change in their projection for the year.
The RBNZ left the OCR unchanged at 2.5% and delivered a rather dovish statement signaling that uneven recovery in New Zealand's economy would lead the central bank to maintain the OCR unchanged for the rest of the year. There are 3 issues that the RBNZ is worried the most. Strength in New Zealand dollar remained a key worry as exports were affected. Governor Wheeler warned that prolonged "overshooting" in the currency would trigger reduction in the OCR. Also, policymakers stressed that 'ongoing fiscal consolidation' would slow overall demand. The central bank also stated that 'worsening drought conditions are creating difficulty in much of the country'. Indeed, the drought condition has deteriorated since the RBNZ's economic forecasts and this would probably cause the central bank to lower its forecast of farm activity in the June MPS.
The SNB also left the 3-month LIBOR target at 0-0.25% with policymakers committing to maintain the minimum 1.20 EURCHF exchange rate “with utmost determination”. The central bank remained cautious about the global economic outlook, stating that 'global economic growth was rather weak in the fourth quarter'. Domestically, economic activity also moderated during the inter-meeting period with the jobless rate climbing up slightly. The central bank forecast GDP growth of 1.0–1.5% this year. The central bank said "downside risks to the Swiss economy remain considerable but tensions in the Eurozone might increase again. outlook. Based on the assumption of an unchanged 3-month Libor at 0.0% over the next 3 years, inflation rate would be around -0.2% for 2013, +0.2% for 2014 and +0.7% for 2015, compared to corresponding projections -0.1%, +0.4% and +0.7% previously. Policymakers saw 'no threat of inflation in Switzerland'. The central bank continued to express concerns about strength in CHF and stated that they would 'take further measures at any time" should conditions require. The franc plunged after the announcement.
On the dataflow, US initial jobless claims surprisingly fell to 332K in the week ended March 10, down from a upwardly revised 342K in the prior month.
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