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... 24th July 2019 · 3 mins read
US Fed Watch Insurance cut won’t prevent further slowdown The Fed is likely to cut interest rates by 25bp next week rather than the 50bp that some have been calling for. Fed officials will hope that move provides enough “insurance” against the downside risks... 24th July 2019 · 7 mins read
Africa Economics Update Nigeria: CBN puts faith in unconventional policy (again) Nigerian policymakers held their key rate at 13.50% today, and indicated that they will rely on unconventional policy tools to boost lending over the coming quarters. These are, however, unlikely to... 23rd July 2019 · 3 mins read
Nordic & Swiss Economics Update SNB to cut rates in Q1 2020 While recent market attention has been on the ECB and Fed, the rise in the Swiss franc has ratcheted up the pressure on the SNB. As a result, investors have come around to our view that the Bank will... 23rd July 2019 · 3 mins read
Bank of Japan Watch Bank to extend forward guidance We expect the Bank of Japan to extend its forward guidance from spring 2020 to summer 2020 or later at next week’s meeting. However, we think that the financial markets are misguided in anticipating... 23rd July 2019 · 7 mins read
Europe Data Response ECB Bank Lending Survey (Q2 2019) The latest ECB Bank Lending Survey adds to the evidence that the euro-zone economy will remain sluggish. The euro-zone does not seem to be on the brink of recession, but continued slow growth should... 23rd July 2019 · 2 mins read
India Chart Pack Equities have further to fall Indian equities have dropped by over 3% so far in July (see Chart 1), even as most other Asian equities have held up reasonably well this month. The drop appears to have been triggered by proposals in... 23rd July 2019 · 9 mins read
Latin America Economics Weekly Pemex yields to rise further, Chile to cut rates The Mexican government’s underwhelming business plan for troubled state-owned oil company, Pemex, reinforces our view that it is not willing to implement the reforms necessary to stabilise oil... 19th July 2019 · 6 mins read
Africa Economics Weekly South Africa rebound, rate cuts, Zambia bond rally Policymakers in South Africa reduced their key rate by 25bp this week, and we think that they will cut again later this year. Central banks in Nigeria, Angola, and Ghana will probably join in on the... 19th July 2019 · 6 mins read
US Economics Update Does the Fed actually need to cut rates? Despite the run of stronger activity data in recent weeks, the deterioration in the survey evidence, lingering uncertainty over trade policy and the prospect of a prolonged period of below-target... 18th July 2019 · 3 mins read
Bank’s own forecasts point to looser policy The Bank of Canada’s economic forecasts suggest it is closer to making a dovish tilt than is widely thought. 18th July 2019 · 3 mins read
Africa Economics Update South Africa: Another cut likely in September Policymakers in South Africa will probably follow today’s 25bp cut with another 25bp of loosening at their next meeting in September. We expect that South African inflation will ease in Q3, while cuts... 18th July 2019 · 3 mins read
ECB Watch ECB to take the first step towards renewed stimulus Policymakers have been dropping hints for weeks that they plan to loosen monetary policy soon, and at July’s meeting they are likely to take a step in that direction by formally changing their forward... 18th July 2019 · 8 mins read
Asia Economics Update BI cuts rates, but easing cycle likely to be short Bank Indonesia (BI) today cut its benchmark interest rate from 6.0% to 5.75% and hinted that further easing is on the horizon. But the uncertain outlook for the currency means that this is unlikely to... 18th July 2019 · 2 mins read
Asia Economics Update Bank of Korea signals further rate cuts ahead The Bank of Korea (BoK) today cut interest rates by 25bp to 1.50% and signalled that further easing is on the way. Given the poor outlook for growth and the change in sentiment by the central bank, we... 18th July 2019 · 3 mins read
Australia & New Zealand Data Response Labour Market (Jun.) We think the slowdown in employment growth has further to run and suspect that the deterioration in the labour market will cause the unemployment rate to rise before the year is out. 18th July 2019 · 2 mins read
