ECB Watch QE may disappoint high expectations It is virtually certain that the ECB will announce some form of quantitative easing (QE) at its Governing Council meeting on January 22nd. But given the ECB’s natural caution and Germany’s objections... 15th January 2015 · 1 min read
UK Markets Chart Pack Gilt yields hit new lows on growth, not deflation, concerns The decline in UK government bond yields – to record lows at the long end of the curve – appears to have largely reflected building concerns about growth, rather than deflation. While they have fallen... 15th January 2015 · 1 min read
Europe Economics Update Sustained franc strength will hit Swiss economy hard The Swiss National Bank’s (SNB) shock decision to abandon its ceiling for the franc reflected its judgement that the policy was just not sustainable. Unless it can reverse the franc’s appreciation... 15th January 2015 · 1 min read
Global Central Bank Watch How will deflation affect the outlook for monetary policy? Headline inflation is set to be well below zero for the bulk of this year in many advanced economies, including the US and the euro-zone, and we think it will probably dip below zero in the UK and... 15th January 2015 · 1 min read
Global Markets Update Would euro-zone equities benefit from QE? The European Central Bank (ECB) looks set to announce a quantitative easing (QE) programme at its next policy meeting. However, we doubt that it would provide a large boost to euro-zone equities. The... 15th January 2015 · 1 min read
India Economics Update More loosening to follow RBI’s early rate cut The RBI has shocked markets by cutting its policy rates at an unscheduled meeting today, much sooner than most had expected. Given the weakness of the economy and recent falls in inflation, we... 15th January 2015 · 1 min read
Asia Economics Update Korea's policy rate hold to continue The Bank of Korea (BoK) today left its policy rate on hold at 2.0%, and lowered its 2015 GDP growth and inflation forecasts. Although the forecast downgrades may fuel speculation about rate cuts, we... 15th January 2015 · 1 min read
China Data Response Lending, credit (Dec.) & FX reserves (Q4) While a pick-up in banking lending growth in December suggests a slightly more accommodative policy stance, we think stronger growth in other forms of credit reflects a weak base for comparison due to... 15th January 2015 · 1 min read
Japan Economics Update Monetary Indicators Monitor (Dec.) While bank lending expanded at a record pace last year, leading indicators still point to a slowdown in loan growth in coming months. 15th January 2015 · 1 min read
Nordic & Swiss Economics Update Sustained franc strength will hit Swiss economy hard The Swiss National Bank’s (SNB) shock decision to abandon its ceiling for the franc reflected its judgement that the policy was just not sustainable. Unless it can reverse the franc’s appreciation... 15th January 2015 · 1 min read
Bank of Canada Watch Oil price slump unlikely changes neutral rate outlook As a large net oil exporter, the slump in the price of oil is a worrisome downside risk to Canada's economic outlook, which will be offset only partially by the sinking Canadian dollar. For the time... 14th January 2015 · 1 min read
Latin America Economics Update Dilma’s second term agenda takes shape The key elements of Brazil’s President Rousseff’s policy agenda for her second term in office have started to emerge over the past month. The central theme is a return to “orthodoxy”, with fiscal and... 14th January 2015 · 1 min read
Bank of Japan Watch Lower inflation expectations to require policy response The collapse in oil prices will force the Bank of Japan to tear up its inflation forecasts at the Policy Board meeting next week. It is also likely to set back efforts to lift inflation expectations... 14th January 2015 · 1 min read
Emerging Europe Economics Update Polish interest rate cuts on the horizon Today’s decision by the National Bank of Poland to keep its policy interest rate unchanged at 2.00% was clearly on a knife edge and, with the economy set to remain in deflation for much of this year... 14th January 2015 · 1 min read
Asia Economic Outlook Lower oil prices to support growth The recent sharp drop in global oil prices is a positive development for Emerging Asia. It will support growth in most economies and will put downward pressure on inflation, providing scope for... 14th January 2015 · 1 min read
Africa Data Response Ghana GDP (Q3) & Kenya Interest Rate Ghana’s GDP growth picked up in Q3, to 5.1% y/y, following a sharp slowdown in Q2. But given the declines in commodity prices, and tight monetary and fiscal policy, we think that the economy will grow... 14th January 2015 · 1 min read
