US Fed Watch Fiscal stimulus will prompt faster tightening in 2018 At this stage, a 25bp rate hike at next week’s FOMC meeting is all-but guaranteed. Of more interest will be whether the increased prospect of a near-term fiscal stimulus prompts officials to revise up... 6th December 2017 · 1 min read
Canada Economics Update Bank of Canada interest rate hike cycle over The Bank of Canada’s decision to keep interest rates at 1.00% today and its cautious policy statement indicate that, in contrast to the market view, it is in no hurry to raise rates again soon. We... 6th December 2017 · 1 min read
Nordic & Swiss Central Bank Watch Icelandic interest rates to remain on hold At its last meeting in November, the Central Bank of Iceland (CBI) kept policy on hold. Nothing has happened since then to alter our view that interest rates will remain unchanged until 2019. 6th December 2017 · 1 min read
US Economics Update How will fiscal and monetary policy interact? The soon-to-be-finalised fiscal stimulus could prompt the Fed to tighten monetary policy slightly more aggressively next year, although the potential interactions between fiscal and monetary policies... 6th December 2017 · 1 min read
India Economics Update RBI on hold, debate may soon shift to tightening The RBI kept its repo rate on hold at 6.00% today, defying calls from prominent members of the government for further rate cuts. In fact, with core price pressures building, we think the debate may... 6th December 2017 · 1 min read
China Economics Update What to expect in 2018 We’ve revised down our forecast for China’s growth next year on the back of the weakness in recent data. There will be little movement in the official GDP growth numbers but we now expect actual... 5th December 2017 · 1 min read
Emerging Europe Economics Update Polish MPC press conference masks hawkish shift The surprisingly dovish tone taken by Governor Glapinski in the press conference accompanying today’s MPC meeting belies the hawkish shift in sentiment across the Council as a whole. In spite of the... 5th December 2017 · 1 min read
UK Economics Chart Pack Economy maintaining its momentum in Q4 The Office for National Statistics confirmed that GDP grew by 0.4% in Q3 and the economy appears to have maintained its recent momentum so far in the fourth quarter. Indeed, November’s Markit/CIPS... 5th December 2017 · 1 min read
Australia & New Zealand Economics Update RBA may not get its Christmas wish The Reserve Bank of Australia didn’t say as much in the statement released after it left interest rates at 1.5% for the 16th month today, but its Christmas wish must surely be for much more economic... 5th December 2017 · 1 min read
Emerging Europe Data Response Turkey CPI (Nov.) The jump in Turkish inflation to a fourteen-year high of 13.0% y/y in November, from 11.9% y/y in October, will undoubtedly alarm policymakers at the central bank. With the government seemingly... 4th December 2017 · 1 min read
UK Economic Outlook The pay squeeze continues, but should abate next year The rise in inflation, primarily driven by sterling’s post-referendum slide, has taken its toll on consumer spending growth this year. However, we think that the worst of the real pay squeeze has... 1st December 2017 · 1 min read
Asia Economics Weekly Who will follow the Bank of Korea? The central banks in Asia most likely to follow the Bank of Korea over the coming year in raising interest rates are those of Malaysia, India and Pakistan. However, with the exception of Pakistan, the... 1st December 2017 · 1 min read
Japan Economics Weekly Are low policy rates contractionary? Governor Kuroda has recently discussed the idea that extremely low interest rates could undermine bank profits and capital and, ultimately, lending. Evidence for this idea is lacking in Japan, where... 1st December 2017 · 1 min read
Australia & New Zealand Economics Weekly What does the fall in spare capacity mean for wages? While the notable strengthening in the Australian labour market this year has led to some reduction in the high levels of existing spare capacity, wage growth has remained around record lows. And the... 1st December 2017 · 1 min read
RBI Watch Government won’t get its wish Rumours that members of the government are attempting to pressure the Reserve Bank of India (RBI) to loosen monetary policy are nothing new, although continued efforts to undermine the central bank’s... 1st December 2017 · 1 min read
US Employment Report Preview Strong payrolls to keep pressure on Fed We forecast a 200,000 gain in non-farm payrolls in November, with the unemployment rate holding steady at a 17-year low of 4.1%. The latter will concern those Fed officials worried that diminishing... 30th November 2017 · 1 min read
