Asia Economics Update Reserve Bank of India hikes and remains hawkish The Reserve Bank of India (RBI) surprised markets with a 50bp rate hike today, lifting the repo rate to 8.0%. With the accompanying policy statement reinforcing the RBI’s hawkish policy stance, we now... 27th July 2011 · 1 min read
Europe Economics Weekly Back from the brink, for now The positive market reaction to the Greek rescue package is not without some justification. After all, following the dithering and disagreement of recent months, it would not have been a shock if... 26th July 2011 · 1 min read
Asia Economics Update High inflation in Singapore will not bring more MAS tightening The Monetary Authority of Singapore (MAS) revised up its 2011 inflation forecast last week while data out today show that inflation rose in June. Nonetheless, talk of runaway price pressures looks... 26th July 2011 · 1 min read
Latin America Economics Update The next big move in Brazilian rates will be down The Brazilian Central Bank (BCB) hiked interest rates by 25bps to 12.50% last night. The tone of the accompanying statement suggests that rates may now have peaked, although we wouldn’t rule out... 22nd July 2011 · 1 min read
UK Data Response MPC Minutes (Jul.) The minutes of July’s MPC meeting suggested that over the past month the Committee has moved even further away from raising interest rates, with most members judging that “recent developments had... 21st July 2011 · 1 min read
Canada Economics Update Bank of Canada poised to raise rates? By dropping the qualification in its policy statement this morning that monetary stimulus will only be withdrawn "eventually", the Bank of Canada seems to be posturing to raise rates. Obviously there... 20th July 2011 · 1 min read
Emerging Europe Economics Update E.coli outbreak not the only disinflationary factor Inflation fell sharply in most countries in the region last month, due in large part to a surprise drop in food prices. This appears to have been driven by one-off factors relating to the outbreak of... 20th July 2011 · 1 min read
China Economics Update How interest rate policy undermines China’s growth Many of China’s smaller companies are struggling as government efforts to control inflation cause their borrowing costs to soar. The solution, as strange as it may sound, is for benchmark interest... 20th July 2011 · 1 min read
Latin America Economics Update Rates should peak this year The recent spike in food inflation has a little further to run and, in most economies, core inflation pressures are building. But even so we still expect headline inflation to start to fall in pretty... 19th July 2011 · 1 min read
US Economics Update Monetary Indicators Monitor (Jul.) The annual growth rate of our own Capital Economics measure of the M3 aggregate hit a two-year high of 4.9% in June, while the growth rates of both M1 and M2 continued to rise as well. 19th July 2011 · 1 min read
Europe Economics Weekly Still fiddling while Rome starts to burn Having pledged to agree on a new rescue package for Greece last week, euro-zone policymakers managed only another vague statement pledging their commitment to “safeguard financial stability” in the... 19th July 2011 · 1 min read
US Economics Weekly How exposed is the US to European debt defaults? The risk that the US government will default on some of its debt obligations lingered last week as the stand-off over the raising of the debt ceiling appeared to intensify. At the same time, it has... 19th July 2011 · 1 min read
Latin America Economics Update Chile: interest rates pause for breath The Central Bank of Chile (CBC) as expected held interest rates at 5.25% last night. Strong domestic conditions and above-target inflation make further increases likely, but we are nearing the end of... 16th July 2011 · 1 min read
Bank of Canada Watch Rising financial risks give further reason for pause It is almost a foregone conclusion that the Bank of Canada will hold its policy interest rate at 1% next week. More importantly, we think the Bank will not offer any hint of imminent rate hikes, while... 15th July 2011 · 1 min read
Global Markets Update Would a US sovereign credit downgrade rattle Treasuries? Moody’s has become the second major rating agency to put the long-term credit rating of the US government on review for possible downgrade. We think investors in the Treasury market were right to... 15th July 2011 · 1 min read
Asia Economics Update Korea’s policy rate has further to rise The Bank of Korea (BoK) held its base rate at 3.25% today, as expected. Nonetheless, the policy rate is still below pre-crisis levels, while core inflation has further to climb. The upshot is that the... 15th July 2011 · 1 min read
