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ECB will leave rates unchanged next week but raise rates by 50bp in July. Bank staff will revise inflation forecasts up , growth forecasts down . ECB to keep us (and itself!) guessing about design of anti-fragmentation tool. Members of the ECB Governing …
1st June 2022
We think that the Norges Bank will keep interest rates on hold, at +0.75%, next Thursday, before resuming its tightening cycle in June. We forecast one rate hike per quarter this year and next, which would leave rates at 2.50% by end-2023. But the balance …
28th April 2022
Rising price/wage expectations will prompt MPC to raise interest rates by 25bps MPC to announce its decision to sell some of its gilt holdings A tight labour market/more persistent price pressures may mean rates rise to 3.00% in 2023 The weakening …
Having so far been a bastion of dovishness amongst G10 central banks, we think that the stage is set for the Riksbank to start to raise the repo rate next Thursday, and it will press on with further rate rises thereafter. But with “QT” likely to do some …
21st April 2022
ECB will reiterate plan to end asset purchases in third quarter… …but will acknowledge that inflation is much higher than expected. We think it will raise the depo rate as soon as July and lift it to +0.25% by year-end. The Governing Council is likely to …
7th April 2022
The Norges Bank will kick off the post-Olsen era next Thursday with a 25bp interest rate hike, to +0.75%, and while we expect it to raise rates three more times this year, the balance of risks is skewed towards it proceeding even faster. Meanwhile, …
17th March 2022
War in Ukraine worsening the tricky mix between rising inflation and slowing GDP growth Rising price expectations to force MPC to raise interest rates by 25bps A tight labour market may mean that rates rise to 2.00% next year The economic consequences of …
10th March 2022
ECB will stress caution and flexibility in light of Ukraine war. New ECB forecasts will show lower growth, much higher inflation. Policymakers will still plan to resume normalisation when and if the situation is clearer. At next week’s monetary policy …
3rd March 2022
While the Riksbank is likely to leave the repo rate unchanged at zero next Thursday (10 th February), a hawkish shift is now long overdue. We have pencilled in a 25bp repo rate hike in November 2022, which is ahead of the economic consensus, but there is …
3rd February 2022
The unfavourable growth/inflation trade-off has worsened We think investors are right to price in an interest rate hike in February to 0.50% And we expect rates to rise to 1.25% by end-2022, further than most anticipate The further surge in inflation …
27th January 2022
Omicron, market sell-off and Ukraine tensions won’t worry the ECB unduly. Lagarde to stress uncertainty over inflation and note rapid house prices increases. We think the Bank will prepare the ground for limited rate hikes next year. The impact of Omicron …
OPEC under-production likely to continue OPEC continued to raise output by less than its target in December. However, the group is still steadily raising output, which is a key reason why we see the market moving into a surplus this year . The OPEC …
18th January 2022
Norwegian policymakers will keep interest rates on hold, at +0.50%, next Thursday, before resuming their tightening cycle in March. We forecast one rate hike per quarter this year, which is one more than investors have currently priced in over the period. …
13th January 2022
Commodity supply shortages have been widespread over the last year or so There doesn’t appear to be a single cause of these shortages But a key theme is that prices are now close to a peak (if they haven’t peaked already) In this Commodities Watch , we …
21st December 2021
Bank to raise 2022 inflation forecast but still predict an undershoot in 2023. Policymakers will keep open possibility of using the PEPP after March. Christine Lagarde will stress uncertainty and need for flexibility. Just a day after we expect the Fed to …
9th December 2021
A hike this month does not look likely, but is possible Omicron is unlikely to prompt more QE or negative interest rates Lift off to occur early next year, but rates probably won’t rise as far as investors expect We wouldn’t completely rule it out, but we …
Omicron means that a Norges Bank rate hike next Thursday is no longer as nailed on a prospect as it once was, but we still think that policymakers will decide to raise rates to +0.50%. Meanwhile, although the SNB has let the franc rise in recent weeks, it …
The Riksbank is all but certain to leave its policy settings on hold next week. But against a backdrop of above-target inflation and the broader hawkish shift by policymakers elsewhere, we expect it to dial down the dovishness a bit and to perhaps further …
18th November 2021
Investors may be right that the MPC will hike rates in November or December But we think they are wrong to price in rates rising as far as 1.25% by end-2022 Our new forecast is for rates to rise to 0.50% by February, but no higher next year We now think …
28th October 2021
ECB will acknowledge upside risk to inflation but say the rise is mostly temporary. The Bank will also push back against expectations for a rate hike next year. The bigger decisions on future asset purchases will be delayed until December. Nobody expects …
21st October 2021
MPC’s position that interest rate hikes are on the horizon won’t have changed But the weak near-term growth outlook means that a rate rise is unlikely soon We think that Bank Rate will remain unchanged at 0.10% until 2023 The Monetary Policy Committee …
16th September 2021
The momentum in the Swedish economy, and jump in inflation in August, gives the Riksbank plenty to ponder at next week’s policy meeting. While repo rate hikes are not on policymakers’ agenda, the reduced risk of disinflationary pressures lends support to …
14th September 2021
ECB likely to signal that it will reduce its weekly PEPP purchases in the months ahead. But we think it will leave interest rates unchanged until beyond 2025. The Bank will also nudge up its inflation and growth forecasts for this year. The ECB is likely …
2nd September 2021
We think that a few countries will join OPEC, which would boost its market power However, we still expect oil prices to fall over the next few decades … … as countries rush to produce as much as possible against the bleak demand backdrop In this Energy …
19th August 2021
The Norges Bank is set to leave interest rates on hold at zero next Thursday (19 th August), but it will almost certainly start to raise them, and tighten macroprudential policy further, in September. Recall that the Norges Bank left the policy interest …
12th August 2021
The MPC will probably revise up its near-term inflation forecasts. Only Saunders to break ranks to vote in favour of an early end to the Bank’s net asset purchases. The MPC is unlikely to signal interest rate hikes are getting closer. While the Bank of …
29th July 2021
Governing Council will not change its key policy settings next week. However, it will amend its forward guidance to reflect its new, more dovish strategy. The new guidance will push back the likely timetable for any future rate hike. The ECB will set out …
15th July 2021
The Riksbank is all but certain to leave its repo rate on hold next Tuesday (27 th April), and will stick to the plan to spend the entire SEK 700 billion asset purchase envelope by the end of the year. The stage is set for a prolonged period of policy …
20th April 2021
The Norges Bank will almost certainly leave its key interest rate on hold at zero next Thursday (20 th August), and we expect it to reiterate that it is in no rush to tighten policy. Having cut its key policy interest rate to a record low of zero at its …
13th August 2020
The Bank will cut its forecasts for GDP growth and inflation in light of the virus. On balance, we think it will reduce its deposit rate by 10bp next week. We also expect the Bank to tweak the terms of its longer-term financing operations. The ECB will …
3rd March 2020
There is no prospect of any change in policy at next week’s meeting… …but we are still forecasting more policy loosening later this year. Details of the scope and timetable of the strategy review may be revealed. At Christine Lagarde’s second meeting as …
16th January 2020
Three months after the September policy package, no change is likely next week. The spotlight on Thursday will be on Ms Lagarde herself, and her policy review. Further ahead, we still expect more ECB easing, prompted by low inflation. With little chance …
5th December 2019
Clashes on Governing Council will cast a shadow over Draghi’s farewell party. No chance of policy action next week, but we think policy will be loosened next year. Forthcoming review to change inflation target and possibly communication strategy. Mario …
17th October 2019
Norges Bank to raise rates in September, but this will be the end of the tightening cycle. It is now a question of when, not if, the SNB cuts rates further into negative territory. Expected dovish shift by the Riksbank will ensure that the krona stays the …
8th August 2019
The ECB is likely to change its forward guidance to signal that a rate cut is coming... … and it might also add an explicit reference to the possibility of re-launching QE. All this would confirm investors’ expectations that looser policy is on the way. …
18th July 2019
