Australia & New Zealand Economics Focus Will the RBA use unconventional tools? Our central scenario is that cutting interest rates to 0.5% will be sufficient to restore growth and eventually return underlying inflation to the RBA’s target. If more stimulus were required, the... 17th July 2019 · 18 mins read
Asia Economics Update What will the second quarter growth figures show? Early indicators suggest that GDP growth slowed sharply across Emerging Asia in the second quarter. Although most countries should stage a gradual recovery over the coming year, growth is likely to... 17th July 2019 · 3 mins read
Asia Economics Update Pakistan: further rate hikes needed to combat inflation Pakistan’s central bank (SBP) today raised its benchmark interest rates by a further 100bp amid continued concerns about high inflation and the country’s current account deficit. With inflation set to... 16th July 2019 · 3 mins read
Africa Economics Update Nigeria: CBN rules unlikely to boost lending New regulations from the central bank will probably do little to encourage lending to the private sector. So long as government bond yields remain elevated, banks will prefer to park their money in... 16th July 2019 · 3 mins read
Australia & New Zealand Data Response New Zealand - Consumer Prices (Q2) We doubt the strength in inflation in Q2 will be maintained for long and we expect underlying inflation to remain below the mid-point of the RBNZ’s 1-3% target band for the foreseeable future. That’s... 16th July 2019 · 2 mins read
India Data Response Wholesale Prices (Jun.) The wholesale price index is not the preferred measure of inflation for India’s policymakers, but the continued decline in the headline rate in June will help the MPC to justify another rate cut at... 15th July 2019 · 2 mins read
Latin America Economics Weekly Banxico moving towards rate cuts, Brazil’s pension bill The minutes to the last Mexican central bank meeting, published yesterday, revealed a more dovish shift on the Bank’s Board than we had expected. We now think that an interest rate cut at the next... 12th July 2019 · 5 mins read
Bank of Canada at a crossroads Given the recent run of stronger economic data, we thought the Bank of Canada might sound a cautiously optimistic note following its policy meeting this week, but the statement remained relatively... 12th July 2019 · 7 mins read
UK Economics Weekly Prospect of higher interest rates drifting further away Despite the rebound in monthly GDP growth from -0.4% m/m in April to +0.3% m/m in May, the economy probably just about contracted in Q2 as a whole. Some of that is just payback from activity being... 12th July 2019 · 8 mins read
Africa Economics Weekly Kganyago reappointed, rate cut likely next week The re-appointment of South Africa’s respected central bank governor will help to allay fears concerning the independence of the Reserve Bank. We think that policymakers will cut their policy rate... 12th July 2019 · 5 mins read
Europe Economics Update ECB account confirms dovish intentions A lot has happened since the Governing Council’s policy meeting on 6th June, so the account published today has arguably been superseded by events. But it does confirm that even five weeks ago the... 11th July 2019 · 3 mins read
Global Central Bank Watch Personnel changes point to looser policy Recent news about a number of staff changes among the world’s central banks has supported our view that widespread policy loosening is to come. As the next ECB President, we suspect that Christine... 11th July 2019 · 15 mins read
Africa Economics Update South Africa: More evidence of Q2 recovery Activity data for May added to the evidence that the economy rebounded following its contraction in Q1. Even so, we think that the Reserve Bank will cut its policy rate from 6.75% to 6.50% next week. 11th July 2019 · 2 mins read
UK Economics Focus Political risks and three big economic trends While it is recognised that political developments, such as a no deal Brexit and a Labour government, have the capacity to send the economy in different directions, it’s not as well known that three... 11th July 2019 · 20 mins read
Latin America Economics Update Brazil’s pension vote paves way for larger rate cuts The large margin of victory for Brazil’s pension bill in its first vote in the lower house last night is likely to result in a rally in local markets later today, and makes an interest rate cut at the... 11th July 2019 · 3 mins read
Bank’s forecasts show it is becoming more dovish Although the tone of Bank of Canada’s monetary policy statement remained fairly neutral, its updated forecasts suggest that the Bank is losing faith in the economy’s short-term prospects. We continue... 10th July 2019 · 3 mins read
