25bp hike next week likely to be the last, with rates peaking at 5.00%-5.25% Economic weakness and falling inflation to prompt rate cuts later this year We expect fed funds target range to have fallen to 2.50%-2.75% by end-2024 The Fed looks set to …
26th April 2023
Table of Key Forecasts Overview – Headline inflation looks set to fall sharply as energy effects subside and the let-up in product shortages reduces goods inflation further. We also expect services inflation to decrease as demand weakens, allowing …
Inflation moderating, but still far too strong to be consistent with RBA’s target Further tightening needed to return inflation to target by mid-2025 Rate cuts will start a bit later than most expect; our forecast is Q2 2024 Note: We’ll be discussing the …
Note: We’ll be discussing the BOJ’s April decision and the fate of YCC in a 20-minute online briefing at 09:00 BST/16:00 SGT on Friday, 28th April . Register here . GDP growth falling short of expectations, but price pressures increasingly broad-based …
21st April 2023
The Riksbank will raise its key policy rate by another 50bp next week, bringing it to 3.5%, and we think a final 50bp increase is most likely in June. Policymakers sounded pretty hawkish at the February meeting and incoming data since then have …
19th April 2023
Forecasts unchanged, lower production will support prices Despite justifying its recent production cuts on an uncertain demand outlook, OPEC did not make any changes to its 2023 global GDP or oil demand forecasts in its monthly report for March. We think …
13th April 2023
Inflation has fallen faster than Bank expected Probably too soon for Bank to drop its bias toward further rate hikes New neutral policy rate estimate could move long-run rate expectations The recent banking turmoil in the US means the Bank of Canada may …
5th April 2023
Central banks focused on inflation for now, but will monitor credit in the months ahead Conditions were already tightening before recent turmoil… …and by Q3, lending surveys and spending data will show clear signs of strain Central banks are now in a …
Hike to repo rate (to 6.75%) next week will likely be last in the cycle Slower growth and inflation could mean MPC is laying groundwork for cuts before long Consensus coming round to our view that rates will be cut in early 2024 With the turmoil in the …
30th March 2023
The RBNZ will temper rate rises, but continue hiking to 5.25%. The Bank will look past the disruption to activity driven by Cyclone Gabrielle. Even so, recession-induced disinflation will pave the way for rate cuts by year-end. With the latest economic …
29th March 2023
RBA has signalled that it will consider pausing its tightening cycle next week On balance, the economic data are consistent with a pause Final 25bp rate hike in May to be followed by cuts in Q2 2024 The RBA has signalled a pause in its tightening cycle at …
Commodity markets were not spared the effects of widespread turmoil in the global banking system. Most prices ended the week lower as investors fled risky assets. The gold and silver prices bucked this trend and surged higher; unsurprising in a week …
17th March 2023
We don’t think the collapse of SVB, problems at Credit Suisse and volatility in markets will deter the Norges Bank from raising its policy rate by 25bp next week, to 3.0%. If anything, the risks are skewed towards a 50bp hike. And we think the policy rate …
We think the SNB will push ahead with rate hikes despite the Credit Suisse crisis, and raise the policy rate by 50bp to 1.5% next Thursday. By its own exacting standards, inflationary pressures in Switzerland are acute with core inflation reaching its …
16th March 2023
Close call, but if the situation doesn’t deteriorate further we think there will be a 25bps hike Beyond that, fading of banking worries and stronger data required for more hikes Markets may be underestimating how far interest rates will be cut next year …
Fed has difficult decision to weigh financial stability needs against inflation target. On balance, we think the Fed will still push ahead with a 25bp hike. But inevitable pull-back in bank lending means Fed should be cutting before year-end. The Fed …
15th March 2023
OPEC sticks together and will keep output constrained OPEC’s monthly report for March noted that the group has stuck to the production targets agreed in October last year. Accordingly, we have revised down our forecasts for the group’s output in 2023. The …
14th March 2023
50bp hike looks a done deal. New guidance likely to explicitly point to higher for longer policy rates. No more news on QT next week, but we expect it to accelerate in July. We expect the ECB to raise interest rates by 50bp next week and accompany that …
9th March 2023
Bank under political pressure to abandon Yield Curve Control as inflation surges Incoming Governor Ueda seems to have been given a mandate to end the policy However, existing Governor Kuroda may well spring one last surprise Yield Curve Control is on …
3rd March 2023
Encouraging signs in January CPI and economy has slowed sooner than expected But labour market still tight and wage pressures too strong Risk of higher interest rates elsewhere also keeps pressure on the Bank The fall in CPI inflation in January and …
1st March 2023
Data a touch softer than expected, but not soft enough for RBNZ to back away We still expect rates to peak at 5.5% by the middle of this year Looming recession will prompt looser policy by year-end The incoming data have been a touch softer than the RBNZ …
15th February 2023
Output still below quota, demand will be key OPEC’s monthly report for February did not make any major revisions to its forecasts. That said, the group is clearly worried about both the outlook for global demand and supply from Russia. We think OPEC is …
14th February 2023
Markets’ focus shifting to forward guidance as pace of rate hikes slows Any hints of an end to tightening cycles are still strongly data-dependent But the data will allow for rate cuts sooner than many central banks now imply Now that inflation has …
8th February 2023
MPC to mark end of tightening cycle with 25bp hike to repo rate (to 6.50%) next week Slower growth and inflation could mean MPC is laying groundwork for cuts before long Rate cuts to materialise in early 2024, sooner than consensus expects With …
2nd February 2023
With inflation and price pressures still high, the Riksbank will probably raise interest rates by 50bp next week. However, in contrast to the market, we think this will probably end the tightening cycle and are bringing forward our forecast for a first …
Consumption remains resilient and labour market still very tight With inflation still accelerating, we expect the cash rate to reach 3.85% by April However, sharp slowdown in activity and inflation will prompt rate cuts by year-end The incoming data …
31st January 2023
A 50bp rate hike next week seems to be literally a done deal. The recent strength of the economy means ECB will hike further. Quantitative tightening looks set to accelerate from June. With a 50bp rate hike at next week’s ECB meeting seemingly a done …
26th January 2023
Despite some good news, another 50bps rate hike is most likely Next phase will be MPC pausing to assess influence of higher rates, but we’re not there yet Next big surprise may be that rates are cut by more than investors expect in 2024 Another 50 basis …
Many officials support downshift to 25bp hike at upcoming policy meeting. But officials still see multiple hikes beyond next week. We expect rates to peak just below 5%, with cuts starting later this year. We expect the Fed to downshift to a 25bp rate …
25th January 2023
Economic growth slowing and inflation falling But labour market still tight and inflation expectations too high Bank to drop down to 25 bp hike, but likely to add hawkish guidance The Bank of Canada is set to raise interest rates by a smaller 25 bp …
18th January 2023
OPEC keeps 2023 forecasts unchanged OPEC left its annual supply and demand forecasts broadly unchanged but tweaked the quarterly profile. Like us, the group expects demand to rise faster than supply, which is a key reason why we expect prices to rise over …
17th January 2023
The Norges Bank is one step from ending its tightening cycle. We expect it to raise its policy rate by 25bp next week, to a peak of 3%. After that it is likely to pause while it waits to assess the full effects of the cumulative 300bp of tightening that …
12th January 2023
Widening of tolerance band has done little to improve market functioning Nomination of less dovish Governor would signal Yield Curve Control is on its way out However, renewed slowdown in inflation will prevent policy rate hikes The widening of the …
11th January 2023
Table of Key Forecasts Overview – Inflation is finally falling and we envisage further sharp declines in almost all economies during 2023. (See Chart 1.) In most cases, this disinflation will be more dramatic than either the consensus of economists or …
3rd January 2023
OPEC lowers its oil demand forecasts for H1 2023 OPEC lowered its world oil demand forecasts for the next six months yesterday, but raised its demand forecasts for the following six months. This supports our view that the cut to OPEC+ output quotas from …
14th December 2022
Consumers shedding virus-related caution and inflation surging to multi-decades highs However, global headwinds are strengthening and import prices are slowing Bank would be very brave to start tightening during a global recession Window for policy …
13th December 2022
We expect the Norges Bank to raise its policy rate by 25bp next week, to 2.75%. Signs that the economy is weakening by more than expected might encourage policymakers to nudge down their interest rate forecast. But we still suspect that the policy rate …
8th December 2022
The Bank is most likely to slow the pace of rate hikes to 50bp next week. But we forecast a further 100bp of hikes next year to a peak deposit rate of 3%. The key principles guiding QT will be that it is steady and slow. There is a case for the ECB to …
Shift down from 75bps hike in November to 50bps hike in December MPC starting to think more about the level of rates rather than the pace of rate hikes We think rates will rise to a peak of 4.50%, before being cut sharply in 2024 A shift from the 75 …
The SNB is likely to look through the recent fall in inflation and hike rates by 50bp next Thursday, to 1.0%, in line with market expectations. We now think that this will be the end of the tightening cycle. Recall that the SNB raised its policy rate by …
Pace of tightening to slow with 50bp rate hike Powell to maintain hawkish line; projections may show higher peak in rates But further good news on inflation will prompt a rethink soon The Fed is set to slow the pace of tightening with a 50bp rate hike …
7th December 2022
International efforts to halt and reverse nature loss dovetail with aims to reduce net greenhouse gas emissions by protecting and expanding so-called carbon sinks, such as forests. But this is only one part of the de-carbonisation puzzle and does not …
30th November 2022
Higher interest rates weighing on domestic demand Core inflation pressures eased in October Bank to drop down to 25 bp hike as it balances risks of over- and under-tightening The easing of the three-month annualised measures of core inflation in October …
Labour market remains very tight but consumption moderating and inflation peaking Risks to our above-consensus cash rate forecast are shifting to the downside With GDP growth slowing sharply next year, we still expect rate cuts from late-2023 With …
Pace of tightening to slow as growth comes off boil and inflation passes the peak 25bp hike to repo rate likely next week, and cycle to draw to a close by early-23 Rate cuts could come onto the agenda by late next year With inflation having passed the …
29th November 2022
Global biofuel production unlikely to ramp up anytime soon … … as governments instead prioritise EVs as the future of green transport. As such, elevated food prices shouldn’t be exacerbated by biofuels competing for crops. Global food prices are at …
28th November 2022
With inflation still more than five times the Riksbank’s target, Stefan Ingves may be tempted to end his marathon stint as Governor with another 100bp rate hike. But we think the Bank is more likely to raise rates by 75bp, to 2.5%, while signalling more …
17th November 2022
Broad-based strength in labour market and inflation to prompt 75bp hike next week Rates to peak at 5.0% by April With inflation set to drop back, RBNZ will cut rates in late-2023 With the labour market and inflation going from strength to strength and …
16th November 2022
OPEC supply drops but further falls to come OPEC’s monthly report for October showed a sharp drop in the group’s production, and further falls are likely if members are to abide by their new quotas from November. The OPEC Monthly Oil Market Report for …
14th November 2022
The pace of global monetary policy tightening is slowing But neither history nor central bank guidance give a reliable steer of the future profile Early signs are that the Bank of Canada and US Fed will lead the retreat next year In recent weeks, …
10th November 2022
