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 …
28th October 2020
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
Officials prefer strengthening forward guidance over yield caps New language in statement might introduce a soft form of average inflation target Fed may eventually need to expand Treasury purchases again The upcoming FOMC meeting, which concludes on 29 …
22nd July 2020
OPEC to increase production quotas as it forecasts faster demand growth OPEC production continued to decline in June, largely due to a contraction in Saudi output. However, with OPEC becoming more optimistic on demand, we think that (new) higher quotas …
14th July 2020
Now that quarantine restrictions are being lifted, mine supply should recover But still-high rates of infection in Latin America may act as a constraint The risks look largest for copper, but iron ore supply could also take a hit In this Metals Watch , we …
10th July 2020
The ECB is very unlikely to change policy next week... … but we think it will reiterate its willingness to do more if needed… … and, later in the year, expand the PEPP even further. We don’t expect any changes to ECB policy next week, but Christine …
9th July 2020
Bank unlikely to announce any major policy changes. May present only partial set of forecasts in its new Monetary Policy Report. Little need for yield curve control at this stage. As the latest high-frequency data and surveys look encouraging, and policy …
8th July 2020
Lending schemes still well below ceilings and appetite for bank lending has declined Strains in foreign currency funding markets subsiding Concerns about financial stability will prevent rate cuts The Bank of Japan is likely to leave policy settings …
Uptake of central bank lending facilities has been mixed But lending is reaching firms, either through governments or central banks… … and central bank backstops are offering important reassurance to investors This month has seen a further shift among the …
2nd July 2020
Activity and labour market exceeding Bank’s expectations But unemployment set to remain far above pre-virus levels, weighing on wage growth Bank may resume bond purchases at some point, perhaps early next year Given that the economy has coped better with …
30th June 2020
Table of Key Forecasts Overview – Over the next few months, inflation will be dominated by oil price effects as the previous slump unwinds and headline rates rise from their current lows. Some components of core inflation, such as airfares and …
25th June 2020
While we still expect the Riksbank to cut its repo rate back into negative territory later this year, it is set to keep its powder dry at its policy announcement next Wednesday (1 st July). Recall that the Riksbank left its repo rate unchanged at zero …
24th June 2020
Relatively high rates of compliance unlikely to last May saw the latest OPEC production cuts come into force, with compliance among members fairly good. That said, a gradual pick-up in oil prices and demand, together with the prospect of some Libyan …
18th June 2020
RBNZ beginning to slow the pace of QE New Zealand economy recovering solidly The RBNZ will hold off until 2021 to launch negative rates to address low inflation The RBNZ has started to reduce the pace of asset purchases as economic activity has recovered. …
The Swiss National Bank and the Norges Bank are all but certain to leave their policy settings unchanged at the scheduled announcements next Thursday (18 th June) and for the foreseeable future. Recall that the SNB left interest rates on hold at -0.75% at …
11th June 2020
MPC likely to announce another £100bn of QE in June… …and that won’t be the last expansion Negative interest rates possible, but far from guaranteed The Bank of England has much more work to do. It will probably start by announcing £100bn more …
Existing lending schemes still well below ceilings But latest supplementary budget foresees additional subsidised lending Bank to secure funding for commercial lenders by further increase in lending schemes The Bank of Japan has already done a lot to …
9th June 2020
Low yields mean there is no rush to adopt yield curve control FOMC could make an impact just by publishing interest rate projections again Fed slow to roll out its 13( 3 ) emergency lending facilities The Fed has several different policy options for …
3rd June 2020
Stimulus announced at China’s NPC is positive for commodities demand and prices But credit growth will be much lower than it was post-GFC Accordingly, the stimulus is unlikely to send prices soaring like in 2009 China’s stimulus spending in 2009 in the …
29th May 2020
The ECB is likely to increase the PEPP by a minimum of €500bn next week. Policymakers may also say the PEPP will run until at least mid-2021. We no longer anticipate a further reduction in the deposit rate. Policymakers have signalled their intention to …
28th May 2020
We estimate that non-farm payroll employment fell by 9 million in May, taking the cumulative decline since February close to 30 million and pushing the unemployment rate above 20%. The loss of 20.5m jobs in April was as expected based on the tsunami of …
First meeting for new governor Tiff Macklem. Some positive signs since last meeting, but some worrying ones as well. Downside risks raise the case for more policy support. We expect the Bank of Canada to announce additional corporate bond purchases next …
27th May 2020
Previous government bond purchases were focused on restoring liquidity Unemployment is rising and inflation set to slump Bank may launch fresh round of purchases focused on lowering long-term rates We suspect that the Reserve Bank of Australia will keep …
26th May 2020
Profitability and production at US shale firms has slumped owing to low oil prices We expect US oil output to remain low throughout the rest of 2020 … … but it could start to bounce back in 2021 Since the outbreak of the coronavirus, oil demand has …
21st May 2020
The silver price has historically been influenced by industrial metals and gold prices As a safe haven, silver has disappointed relative to gold Going forward, we expect the silver price to underperform gold through to end-2020 Silver is often described …
18th May 2020
A last hurrah for OPEC output OPEC production jumped up in April, but this will prove a one-off given the agreed output cuts from May onwards. We expect OPEC compliance with the cuts to be fairly good in the coming months as prevailing low prices and …
13th May 2020
Numerous lending facilities have been either launched, revived, or expanded Many aim to provide liquidity to financial institutions and non-financial firms But the line between liquidity operations and monetary policy is sometimes blurred Traditionally, …
7th May 2020