OPEC production to increase in January, but fall later in the quarter OPEC’s oil production rose in December and is likely to pick up again this month in line with its higher quotas. However, the group’s total output will almost certainly fall in February …
14th January 2021
The Norges Bank will almost certainly leave its key interest rate on hold at zero next Thursday, but there is an outside chance that it could start to re-tighten macroprudential policy to tame the housing market. Having slashed the policy interest rate by …
No signs of stress in financial markets and policy already extremely loose Bank has already started to address side effects of aggressive easing Upcoming review still shrouded in mystery The Bank of Japan is unlikely to respond to the worsening virus …
Speculation that Bank could cut interest rates looks overdone. Bank set to upgrade its GDP forecasts. Macklem faces communications challenge as Bank attempts to keep yields low. The Bank of Canada is set to upgrade its growth forecasts next week, despite …
13th January 2021
Table of Key Forecasts Overview – Energy price base effects will drive up inflation in the first half of 2021, but central banks will look through this. Indeed, in most cases, inflation should be around or below target over the second half of 2021 and …
17th December 2020
Weaker oil demand forecast could lead to lower OPEC+ supply in Q1 OPEC cut its 2021 oil demand forecast in its latest report, which we suspect could delay further easing of its production cuts early next year. This should help put a floor under prices . …
14th December 2020
We do not expect the Swiss National Bank or the Norges Bank to throw up any festive surprises at their final policy announcements of the year next Thursday (17 th December). Vaccines point to brighter times next year, but we still think that both will …
10th December 2020
Vaccines mean the recovery may not need a further monetary boost But monetary policy will remain extremely loose for years yet And a no deal Brexit could yet prompt further easing The next Monetary Policy Committee (MPC) meeting on Thursday 17 th December …
Recovery has surprised to the upside but third wave is a downside risk Bank to extend emergency lending facility New facility to support regional banks highlights discomfort with negative rates With the ongoing wave of infections in Japan the most severe …
Officials unconvinced of need for, or benefits of, further stimulus But guidance on asset purchases is set to be updated Strength of rebound in inflation next year could catch the Fed off-guard We expect the Fed to keep its main policy settings unchanged …
9th December 2020
We think that OPEC+ production will rise by less than the new agreement allows. Some countries will make compensatory cuts, while weak Q1 demand could prevent monthly rises in February and March . Last Friday, OPEC+ announced that would increase output by …
7th December 2020
The Bank will play down the chances of a quick return to economic health. We expect it extend the PEPP until at least mid-2022 and announce more TLTROs. But the Governing Council will probably leave the deposit rate unchanged. Policymakers at the ECB have …
3rd December 2020
Bank was already assuming sizeable economic hit from new waves of the virus. So unlikely to loosen policy amid recent restrictions, despite hints it could do more. Vaccine news and new fiscal plan present upside risks to Bank’s longer-term forecasts. The …
2nd December 2020
No change in policy this week given high inflation Markets are pricing in modest hikes within the next 12-18 months In contrast, we think rates will remain at current level or drop further We agree with financial markets and the consensus that India’s …
30th November 2020
We expect OPEC+ to extend its current 7.7m bpd supply cuts for at least another three months at its next meeting. Although prices have rallied in recent weeks on hopes of a faster recovery in demand, output restraint will still be needed to avoid …
27th November 2020
Central banks keen to bridge a difficult period before vaccines are rolled out… … and reduced fiscal stimulus shifts onus of supporting recovery to monetary policy The legacy of the virus will warrant rock bottom interest rates for several years The …
25th November 2020
Vaccine may be available by Q2 2020, allowing full reopening of the economy Labour market doing much better than Bank had anticipated Case for additional stimulus is diminishing The Reserve Bank of Australia won’t make any policy changes at its meeting on …
24th November 2020
The Riksbank is likely to leave its repo rate on hold at zero next Thursday (26 th November). But with the economy heading south, and the ECB gearing up to ease again, we think there is a good chance that policymakers will take the opportunity to expand …
19th November 2020
The partial recovery in oil prices points to a rise in the number of rigs drilling for oil However, the relationship between rigs and oil production is less clear cut In addition, changes in rigs take longer to translate into changes in output in the US …
17th November 2020
Progress on a vaccine could lead OPEC to push up its 2021 demand forecasts OPEC’s oil production jumped in October as Libyan output surged. But we expect that OPEC and its allies will extend their current level of supply cuts into early 2021, which will …
11th November 2020
Economic data have been mixed but generally support further easing RBNZ to launch lending programme to lower funding costs RBNZ to cut OCR to -0.25% in April and hold rates steady thereafter At its meeting on 11 th November, the Bank will likely unveil a …
5th November 2020
The Norges Bank will almost certainly leave its key interest rate on hold at zero next Thursday and will probably reiterate that it is in no rush to hike. However, given the backdrop of rising house prices, we think that policymakers will start to …
29th October 2020
Solid incoming data mean Fed officials in no rush to provide more accommodation More serious wave of coronavirus infections could prompt more easing Expectations of a big post-election stimulus would pose a dilemma Having rolled out major changes over the …
28th October 2020
Consensus comes round to our view that MPC will expand QE by £100bn in November This won’t be the last QE expansion Negative rates are possible, but probably not for another 6-12 months Back in June, we were pretty much alone in forecasting that the MPC …
Cash rate target, three-yield target and TFF interest rate to be lowered to 0.10% Interest rate on Exchange Settlement balances to remain at 0.10% Quantitative easing is coming and the Bank may buy $150bn in government bonds The Reserve Bank of Australia …
PEPP “envelope” likely to be raised in December, perhaps to €2trillion. ECB may also cut the interest rate charged on TLTROs. A deposit rate cut unlikely unless the euro appreciates further. With the economy flagging again, policymakers at the ECB are …
22nd October 2020
Bank to emphasise downside risks to the outlook. Policy rate to remain near-zero until “inflation target is sustainable achieved”. Balance sheet expansion set to resume next year. The economy has recovered faster than the Bank of Canada expected, but …
21st October 2020
Bank set to lower GDP growth and inflation forecasts slightly Expansion in BoJ’s assets already very large by international comparison Bank is unlikely to announce additional easing The Bank of Japan may revise down its GDP growth and inflation forecasts …
OPEC production to remain low, even as Libya comes back on stream OPEC’s oil production fell in September and, except for Libya, we expect output by individual member states to either stabilise or decline a touch in the coming months as prices remain weak …
13th October 2020
Bank coming round to our view that wage growth and inflation will remain soft Cash rate target, three-yield target and TFF interest rate to be lowered to 0.10% Additional bond purchases to lower long-term yields also on the cards The Reserve Bank of …
29th September 2020
Elevated inflation will keep new-look MPC on the side-lines next week But dire economic outlook means it will resume loosening cycle soon Markets expect no change for prolonged period We agree with market and analyst expectations that the Reserve Bank’s …
23rd September 2020
Table of Key Forecasts Overview – The effects of demand weakness should continue to dominate those of supply constraints, leaving underlying inflation subdued in most parts of the world over the next few years. Policy measures including temporary VAT cuts …
21st September 2020
Persistently weak demand could force an extension of OPEC production cuts OPEC’s oil production rose sharply in August on the back of higher output quotas. However, if concerns persist about global oil demand, which was discussed at length at yesterday’s …
18th September 2020
We expect the Swiss National Bank and the Norges Bank to both leave their policy settings unchanged next Thursday (24 th September). But while the former will no doubt sound as dovish as ever, Norwegian policymakers will probably further prepare the …
17th September 2020
RBNZ pushing QE to its limits Second wave delays the economic recovery The RBNZ set to launch negative rates next year The RBNZ is reaching the limits of its asset purchase program. We therefore doubt the Bank will make any significant policy changes at …
After a tweak-laden last policy meeting, the Riksbank is likely to maintain the status quo next Tuesday (22 nd September). While there is no burning platform for policy change, we think that the next move in interest rates will eventually be down. Recall …
15th September 2020
Downside risks to the Bank of England’s forecasts are crystallising MPC will wait until the current QE program is ending before adding more stimulus QE still the tool of choice, negative rates possible further ahead The initial recovery has been …
10th September 2020
New average inflation framework points to more policy support But Fed officials apparently in no rush to provide more accommodation Modest tweaks risk disappointing markets The Fed’s new average inflation framework implies that more stimulus measures are …
9th September 2020
Other central banks won’t follow the Fed immediately… …but direction of travel is towards greater tolerance of inflation in advanced economies Japan’s experience highlights that some will have more success than others For the past thirty years the …
Bank will stay the course at upcoming meeting Likely future PM Suga has indicated that he sees scope for interest rate cuts But recent comments suggest he won’t interfere in monetary policy decisions The Bank of Japan will leave policy settings unchanged …
No major policy changes on the cards at next week’s Governing Council meeting. Recent developments mean that the ECB will stick firmly to its dovish course. We think the Bank will eventually add to its planned emergency asset purchases. The ECB will not …
3rd September 2020
Economy doing better than Bank anticipated. Bank unlikely to enact any major policy changes. Rates will not be raised until 2% inflation “sustainably achieved”. As the economy is doing better than the Bank of Canada expected and there are signs that core …
2nd September 2020
Draconian lockdown in Victoria to weigh on recovery and lift unemployment Inflation and wage growth set to soften further We still expect the Bank to start buying-longer dated bonds early next year The Reserve Bank of Australia isn’t keen on providing …
25th August 2020
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
Rising OPEC production to limit price gains OPEC production rose in July and the recent introduction of higher quotas means that output will almost certainly continue to increase in the coming months . The OPEC Monthly Oil Market Report (MOMR), released …
12th August 2020
RBNZ on track to meet its QE targets New Zealand economy broadly recovered The RBNZ will hold off until 2021 to launch negative rates to combat weak inflation The RBNZ has stabilised the pace of asset purchases in recent months and is on track to meet its …
5th August 2020
The MPC is unlikely to expand QE before November But it may signal that further stimulus will be needed at some point It could revise down the effective lower bound, leaving the door open to negative rates We expect the Monetary Policy Committee (MPC) to …
30th July 2020
Initial bounce-back in activity has been stronger than expected But renewed lockdown in Melbourne is weighing on recovery and inflation is slumping We still expect a resumption in asset purchases before long The renewed lockdown in Melbourne is set to …
29th July 2020
Signs that recovery is stalling should prompt further easing Aware of inflation risks, a smaller 25bp policy rate cut is likely next week But persistent economic weakness means loosening cycle won’t end there The Reserve Bank of India (RBI) has been …
28th July 2020
