Japan Economics Update Bank of Japan too optimistic about inflation outlook For the first time since July 2014, the Bank of Japan didn’t lower its inflation forecasts any further. However, we believe that the Bank is too optimistic about the inflation outlook and we remain... 23rd January 2018 · 1 min read
Europe Economics Focus Should we worry about the “Draghi put”? The ECB has effectively introduced a “put” option on peripheral bonds, pushing yields and spreads down to record lows. Given recent fiscal progress and the likelihood that the ECB normalises policy... 22nd January 2018 · 1 min read
Africa Economics Update Africa: Cuts on the cards in Kenya, Ghana, & Nigeria Interest rates were kept hold today in Kenya & Ghana, and we expect that both will see rate cuts in 2018. Nigeria’s MPC was unable to meet, but policy there will probably also loosen later this year. 22nd January 2018 · 1 min read
Nordic & Swiss Economic Outlook Exchange rates to diverge as Swedish krona rises Prospects for the Nordic economies and Switzerland are strong, but there are divergent outlooks for monetary policy. In Sweden, inflation is already close to the Riksbank’s target and, with capacity... 22nd January 2018 · 1 min read
China Economics Update Capital Flows Monitor (Dec.) Capital outflows from China rose slightly in December as Chinese households and firms added to their foreign asset holdings. Looking at the year as a whole, capital outflows fell by 80% in 2017. 22nd January 2018 · 1 min read
Asia Economics Focus Is the Philippines overheating? Rapid economic growth, surging imports and strong credit growth have fuelled fears that the Philippines is overheating and that the central bank will soon be forced to hike interest rates to bring the... 22nd January 2018 · 1 min read
Canada Economics Weekly Interest rate hikes likely to be undone before long The Bank of Canada’s upgraded GDP growth forecast for this year looks overly optimistic given NAFTA and housing-related risks. Despite further increases in household borrowing costs and tougher new... 19th January 2018 · 1 min read
Emerging Europe Economics Update CEE currencies: it’s the economy, stupid! The news flow in Central and Eastern Europe (CEE) in the past few weeks has been dominated by political troubles, but currencies have performed surprisingly well. One reason for this is likely to be... 19th January 2018 · 1 min read
Asia Economics Weekly Korea set for strong 2018, but not because of the Olympics The 2018 Winter Olympics, which get under way in South Korea next month, will not provide much of a boost to the country’s economy. But this will not stop South Korea from recording another year of... 19th January 2018 · 1 min read
Japan Economics Weekly Oil at $70 won’t result in policy tightening We expect the price of Brent crude oil to moderate from $70 per barrel to $55 by the end of 2018. But even if global oil prices remain close to current levels, inflation in Japan would only average 1%... 19th January 2018 · 1 min read
US Chart Pack Rebound in inflation could be the big story in 2018 The stronger 0.3% m/m gain in core consumer prices in December provided clearer evidence that the forces weighing on core inflation last year are now firmly in reverse. Admittedly, core CPI inflation... 18th January 2018 · 1 min read
ECB Watch Change in forward guidance less hawkish than assumed While the ECB maintained all elements of its policy support last month, the recent news that it would soon “revisit” its forward guidance saw rate expectations rise and the euro strengthen. At its... 18th January 2018 · 1 min read
Canada Chart Pack Higher interest rates a big gamble The Bank of Canada’s decision to raise interest rates to 1.25% yesterday has reinforced expectations of further rate hikes later this year. According to futures markets, there is a 22% chance of a... 18th January 2018 · 1 min read
US Economics Focus Will the Fed abandon inflation targeting? In the long run we suspect the Fed will move away from rules-based inflation targeting and shift to a more discretionary regime that focuses on financial stability as well as price stability and full... 18th January 2018 · 1 min read
Europe Economic Outlook Sustained upturn need not prompt ECB rate hikes The euro-zone’s impressive upturn looks set to continue apace as reduced political uncertainty, high levels of business confidence, and continued strong policy support allow investment to take off... 18th January 2018 · 1 min read
Nordic & Swiss Central Bank Watch Norges Bank to become more dovish With consumer price inflation set to rise gradually, but house prices falling, we think that the Norges Bank will reiterate next week that interest rates will not rise until the autumn. We suspect... 18th January 2018 · 1 min read
