US Economic Outlook Slowdown will force Fed to reverse course We expect GDP growth to slow from 2.9% to 2.0% this year and only 1.4% in 2020. That weakness should convince the Fed to reverse course and cut interest rates by a cumulative 75bp, with the first... 3rd April 2019 · 1 min read
Canada Economics Update Policy not as loose as Poloz thinks The Bank of Canada’s belief that the policy rate is still far below its neutral level looks doubtful. In fact, market pricing implies monetary policy is as restrictive as it was on the eve of the... 2nd April 2019 · 1 min read
Australia & New Zealand Economics Update RBA will soon have to cut rates The Reserve Bank of Australia sounded more cautious when it left interest rates unchanged at 1.50% today. With the full impact of the housing downturn on economic activity yet to be felt, we think the... 2nd April 2019 · 1 min read
Latin America Economics Update Chile’s central bank signals lower for longer The statement accompanying the Chilean central bank’s decision to hold its policy rate at 3.00% on Friday night signalled that rates are likely to stay on hold for longer than they had previously... 1st April 2019 · 1 min read
Europe Economics Weekly Draghi dovish, mixed bag of data Speeches by policymakers this week suggest that the ECB is likely to provide more policy accommodation within the next six months or so. All the more so as the latest survey data continue to point to... 29th March 2019 · 1 min read
Asia Economics Update Pakistan hikes rates, further tightening to come The State Bank of Pakistan (SBP) today raised its policy rate by a further 50bp to 10.75%, and we think further rate hikes are likely over the coming months due to worries about high inflation and the... 29th March 2019 · 1 min read
Africa Economics Weekly SA debt back under review, central banks’ dovish tilt The upcoming Moody’s review of South African debt has raised fresh concerns about a sell-off in the country’s bond market. But we think that these fears are overdone. Meanwhile, central bank meetings... 29th March 2019 · 1 min read
US Economics Weekly Markets coming round to our view on rate cuts The partial inversion of the Treasury yield curve has attracted a lot of attention over the past week, but we have been more surprised by the speed at which markets have started to price in rate cuts... 29th March 2019 · 1 min read
Europe Economics Update Tiered ECB deposit rate would be a dovish signal If it is introduced (which is far from certain) a tiered deposit rate would reduce the cost of negative interest rates for banks, but it would do so by only a trivial amount. Its main purpose would be... 29th March 2019 · 3 mins read
Japan Economics Weekly BoJ may be on course to sell JGBs The sharp fall in JGB yields in recent weeks means that the Bank of Japan will probably lower its JGB purchases more quickly than we had anticipated. In fact, there’s a chance that the Bank may soon... 29th March 2019 · 1 min read
Middle East & North Africa Economics Update Egyptian central bank pauses easing cycle The Egyptian central bank’s decision today to keep interest rates unchanged (rather than cut rates) appears to have been a result of the jump in inflation in February. But if we’re right that... 28th March 2019 · 1 min read
Global Central Bank Watch Yield curves flatten as case for looser policy builds The flattening of yields curves over recent weeks has raised fears of a sharp economic slowdown to come. Central banks are unlikely to be led by the views of bond markets, not least because their... 28th March 2019 · 1 min read
Emerging Europe Economics Update Czech National Bank flags euro-zone concerns The Czech National Bank made clear that it is more concerned about the impact of weakness in the euro-zone than strong domestic inflationary pressures. We still think that above-target inflation may... 28th March 2019 · 1 min read
Africa Economics Update SARB’s inflation concerns fading The South African Reserve Bank’s (relatively) dovish post-meeting communications support our view that the next move in interest rates will be down (probably in early 2020). The markets have moved... 28th March 2019 · 1 min read
Canada Economic Outlook Economic weakness will force rate cuts this year We expect GDP growth to slow to only 1.0% this year, as the housing downturn weighs on the domestic economy and exports are held back by the global slowdown. That weakness should prompt the Bank of... 28th March 2019 · 1 min read
China Economics Update Weak profits strengthen case for benchmark rate cuts A sharp fall in earnings for industrial firms in January and February shows the pressure that weak demand is putting firms’ balance sheets under. We think officials will respond by cutting benchmark... 27th March 2019 · 1 min read
