US Data Response Fed leaves door open to June rate hike The Fed left its policy rate unchanged today, but the statement kept the door open to another rate hike at the June FOMC meeting. We still expect another three 25bp hikes from the Fed this year... 3rd May 2017 · 1 min read
Nordic & Swiss Economics Update Nordic & Swiss currencies to rebound from April’s falls After depreciating against the euro in April, we think that the Swiss franc, Swedish krona and Norwegian krone will rebound, but for different reasons. Political risk could yet re-escalate in Europe... 3rd May 2017 · 1 min read
Latin America Economics Update Brazil: lower structural interest rate depends on fiscal reform There is now broad agreement in financial markets that interest rates in Brazil will fall into single digits this year, but keeping them there will require the “neutral” or “structural” level of... 2nd May 2017 · 1 min read
Australia & New Zealand Economics Update RBA’s low inflation fears fade The Reserve Bank of Australia left interest rates on hold at 1.5% for the eighth meeting in a row today and we doubt it will be in a position to raise rates until at least 2019. There is still a risk... 2nd May 2017 · 1 min read
Australia & New Zealand Chart Pack The inflation worm has turned The recent rises in underlying inflation suggest that the period of extremely low inflation in both Australia and New Zealand has come to an end. Underlying inflation, which excludes the temporary... 1st May 2017 · 1 min read
Europe Economics Weekly Bank Lending Survey provides more good news for ECB This week’s Bank Lending Survey brought more good news for the ECB. Lending conditions have continued to improve, and growth in the demand for credit points to a continued decent recovery in... 28th April 2017 · 1 min read
Emerging Europe Economics Update Russian easing cycle has much further to run The Russian central bank’s 50bp interest rate cut to 9.25% today was larger than most (but not us) expected and, taken together with the relatively dovish tone of the statement, supports our view that... 28th April 2017 · 1 min read
Asia Economics Weekly Pakistan – improved performance unlikely to last A combination of loose monetary policy and increased infrastructure spending related to the China Pakistan Economic Corridor (CPEC) should push up growth in Pakistan to its fastest pace in over a... 28th April 2017 · 1 min read
Australia & New Zealand Economics Weekly Real wages squeezed by rising price of essentials The rise in inflation in Australia in the first quarter was good news as it suggests the period of very low inflation is now over. But it is also bad news as it means prices are now rising faster than... 28th April 2017 · 1 min read
China Economics Update Construction likely to slow again as property sales cool After falling for years, construction growth in China has stabilised since the start of 2016, supported by a rise in home sales. Dire warnings of developers collapsing have not materialised. But it is... 27th April 2017 · 1 min read
Nordic & Swiss Central Bank Watch Norges Bank to continue signalling possible rate cut The Norges Bank is almost certain to leave monetary policy unchanged at its meeting next week. After all, the Bank will not be updating its forecasts, and there has been little to change policymakers’... 27th April 2017 · 1 min read
Global Central Bank Watch US Fed to continue tightening; others will be slow to follow Despite the pick-up in global growth in the past few months, most of the world’s major central banks are likely to leave policy highly accommodative this year. The ECB may tweak the language in its... 27th April 2017 · 1 min read
Europe Economics Update ECB preparing to tweak guidance in June Given the shift in Mr Draghi’s language at today’s press conference, we think that in June the ECB will remove the reference to “lower” interest rates from its forward guidance. While this would end... 27th April 2017 · 1 min read
Nordic & Swiss Economics Update Riksbank dissenters fail to prevent QE extension Only the Riksbank Governor’s casting vote secured today’s unexpected QE extension. While we have pushed back our expectation for the first repo rate rise in Sweden, we still think that the Riksbank... 27th April 2017 · 1 min read
Japan Economics Update Bank of Japan remains too upbeat about inflation The BoJ upgraded its assessment of the economy at today’s meeting but lowered its inflation forecast for the current fiscal year. We think that the Bank remains too optimistic about inflation and... 27th April 2017 · 1 min read
RBA Watch Why we are no longer expecting more rate cuts The Reserve Bank of Australia will almost certainly leave interest rates on hold at 1.5% at the meeting on Tuesday 2nd May and, in a change to our central forecast, we now no longer expect it to cut... 27th April 2017 · 1 min read
