Middle East & North Africa Economics Update How will the Gulf finance budget deficits this year? Low oil prices mean that budget deficits will persist for some time in the GCC and we think these countries will shift away from a reliance on savings towards issuing debt to plug the gap this year... 10th March 2016 · 1 min read
BoE Watch Heightened uncertainty should ensure unanimous vote Recent developments are unlikely to have caused Monetary Policy Committee (MPC) members to fundamentally change their view since they voted unanimously to leave rates on hold in February. Indeed... 10th March 2016 · 1 min read
Latin America Data Response Colombia GDP (Q4) Colombia’s economy grew by a respectable 3.3% y/y in the final quarter of 2015, but we expect the economy to slow this year as the impact of lower oil prices continues to bite and economic policy... 10th March 2016 · 1 min read
US Economic Outlook Higher inflation will force the Fed to act soon We are often characterised as being “bullish” on the US economy, but our economic growth forecasts are hardly upbeat. Instead, where we really differ from the consensus is in believing that even... 10th March 2016 · 1 min read
Europe Economics Update ECB belatedly delivers, but it can’t work miracles While the ECB today delivered a package of measures which exceeded market expectations, there is no guarantee that it will revive the euro-zone’s flagging economic recovery and eliminate the threat of... 10th March 2016 · 1 min read
Asia Economics Update Rate cuts in Korea can’t be ruled out The Bank of Korea (BoK) today left its policy rate unchanged at a record low of 1.50%. The pressure for a rate cut is building against a backdrop of softening economic data, but we are sticking with... 10th March 2016 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Feb.) Corporate bond yields have collapsed since the Bank of Japan adopted negative interest rates. However, with bonds only accounting for a quarter of corporate debt, bank lending rates would also have to... 10th March 2016 · 1 min read
Australia & New Zealand Economics Update New Zealand - Growing chance that rates in New Zealand fall below 2.0% Today’s 0.25% cut in interest rates in New Zealand, to 2.25% from 2.50%, will have been a surprise to most analysts and the financial markets. But as early as July last year we forecast that rates... 10th March 2016 · 1 min read
Latin America Economics Update Brazil’s political crisis takes dramatic turn Brazil’s financial markets rallied after news broke last week that former President Lula had been detained (and later released) in relation to the ongoing corruption probe at Petrobras. But this... 9th March 2016 · 1 min read
Canada Economics Update Bank of Canada interest rate cut still on the table The Bank of Canada’s decision to hold its key policy rate at 0.50% today doesn’t mean that further rate cuts are off the table, as it depends on the details of the forthcoming Federal stimulus budget... 9th March 2016 · 1 min read
US Fed Watch Fed can’t leave rates this low for much longer Despite the clear improvement in the incoming economic data over the past month, which has triggered a reversal of the earlier tightening in financial conditions, the chance of the Fed raising... 9th March 2016 · 1 min read
Latin America Data Response Brazil Consumer Prices (Feb.) The fall in Brazilian inflation in February, to 10.4% y/y from 10.7% y/y in January, was driven entirely by the unwinding of the impact of regulated price hikes implemented in the same period last... 9th March 2016 · 1 min read
Asia Economics Update Malaysia holds rate, but all eyes on BNM governor succession Malaysia’s central bank (BNM) today kept its policy rate on hold at 3.25% at a monetary policy meeting that will be Governor Zeti’s last after 16 years at the helm. We continue to think rates will be... 9th March 2016 · 1 min read
Bank of Japan Watch Bank likely to announce more easing this month Japan’s economy is struggling to regain momentum and the recent strengthening of the yen is providing a further headwind to efforts to raise inflation. The Bank of Japan will therefore have to step up... 9th March 2016 · 1 min read
Europe Economics Update Portuguese yields to rise further on threat of QE exclusion The latest rise in Portuguese bond yields reflects fears that its debt will soon be classified as junk by all four major ratings agencies, leading the country to be excluded from the ECB’s asset... 8th March 2016 · 1 min read
Global Economics Update Are negative policy rates a plus for the world economy? Negative interest rates have come under attack recently, but in our view most of the criticisms are over-stated. In particular, the costs of negative rates for commercial banks appear to be very small... 8th March 2016 · 1 min read
