US Economics Update Monetary Indicators Monitor (Nov.) The Fed's latest announcement that it will be doubling its open-ended QE3 purchases to $85bn per month means that we can expect a large increase in the monetary base in 2013. As with previous rounds... 17th December 2012 · 1 min read
Japan Economics Update What the LDP win means for Japan's economy As had been widely expected, Sunday’s election has returned the Liberal Democratic Party of Japan to power after a three-year absence. We can expect a two-pronged assault on deflation with significant... 17th December 2012 · 1 min read
US Economics Weekly Fed's thresholds don't alter policy stance We welcome the Fed’s decision to link the timing of its first interest rate hike to numerical thresholds for the unemployment rate and inflation. But this tweak didn’t actually alter the stance of... 17th December 2012 · 1 min read
Europe Economics Weekly Slow progress towards banking union The European Council finally managed to reach some important compromises last week, allowing progress to be made towards setting up an EU-wide bank supervisor in the form of the ECB. But, presumably... 17th December 2012 · 1 min read
UK Economics Weekly Fresh thinking coming to Threadneedle Street Mr Carney’s arrival presents an obvious opportunity to reshape the monetary policy framework and the Governor-to-be last week gave a crucial indication that he, for one, is on board. 17th December 2012 · 1 min read
Asia Economics Update Pakistan's policy rate has further to fall The State Bank of Pakistan (SBP) cut its discount rate by 50bp to 9.5% today. We think monetary policy is likely to be loosened further in a bid to revive private sector credit growth, although rate... 14th December 2012 · 1 min read
Japan Economics Update Poor Tankan increases pressure on Japan's policymakers The Bank of Japan’s Tankan survey showed business conditions deteriorated sharply in Q4, adding to evidence that the economy is likely to have contracted for a third consecutive quarter. The winner of... 14th December 2012 · 1 min read
Latin America Economics Update Chilean rates more likely to fall than rise in 2013 Chile’s economy is currently in a sweet spot between strong growth and low inflation, and we do not expect any moves in interest rates in the near term. But to the extent that rates are changed next... 14th December 2012 · 1 min read
Commodities Update What does Fed policy mean for commodities? The muted reaction to the Fed’s announcement yesterday supports our view that the boost to commodity prices from exceptionally loose US monetary policy has now largely run its course. The monetary... 13th December 2012 · 1 min read
Asia Economics Update Korea's central bank has more work to do The Bank of Korea (BoK) kept its policy rate at 2.75% today, as was widely expected. Korea’s economic slowdown has bottomed out, but we think growth is unlikely to rebound strongly and that inflation... 13th December 2012 · 1 min read
US Economics Update Fed adopts new thresholds and expands QE3 The Fed's adoption of numerical thresholds is, in practical terms, just a tweak in the framework used to signal how long it expects to leave short-term rates at near-zero. Based on the FOMC's new... 12th December 2012 · 1 min read
Asia Economics Update Rate cuts in Sri Lanka are premature We believe today’s unexpected rate cut by the Central Bank of Sri Lanka (CBSL) is premature in light of the large external problems still facing the economy. Given the CBSL’s current dovish stance, we... 12th December 2012 · 1 min read
Europe Economics Focus Has the ECB solved the crisis? Recent actions by euro-zone policymakers and the ECB in particular have prompted some commentators to conclude that the region has turned a corner. But we still expect the crisis to deepen again soon... 11th December 2012 · 1 min read
Bank of Japan Watch December's decision finely balanced The decision at the Bank of Japan’s Policy Board meeting next week is likely to be finely balanced. There are several goods reasons to believe the Board will further extend monetary easing, and... 11th December 2012 · 1 min read
Emerging Markets Economics Focus What to expect from emerging markets in 2013 Emerging markets (EMs) will remain a relative bright spot in 2013. But with export demand from the developed world likely to remain subdued and structural problems dragging on growth in many of the... 10th December 2012 · 1 min read
Emerging Europe Economics Update Russia: interest rate "hike" does not alter monetary stance The Central Bank of Russia (CBR) left its benchmark lending rates on hold today, but hiked its overnight deposit rate by 25bps. Given the liquidity shortage in the interbank market and the fact that... 10th December 2012 · 1 min read
