Thoughts
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May 27, 2024 5:23 AM UTC
Since the BoJ moved interest rate to 0% in March, most market participants expects further tightening as it is hard to believe the BoJ would hike once after all these years of ultra-loose monetary policy, in face of higher inflation. However, with headline inflation trading closer to 2%, it seems th
March 18, 2024 3:35 AM UTC
The RBA meeting on Mar 19th will keep rates on hold as the latest monthly CPI meets estimate but remain above the RBA's inflation target range. The RBA would continue to suggest data dependency be their guide in coming rate decision. We believe there will be no change in forward guidance as CPI is r
January 24, 2024 2:41 PM UTC
Expectations are firming that Donald Trump will win the Republican nomination, but the presidential election race is currently 50/50. If Trump were reelected as U.S. president, what would it mean for U.S. Treasuries?
There would be a very full agenda for financial markets in 2025 if Trump were reel
January 23, 2024 1:06 PM UTC
For 2024 as a whole, we see a strategic process of yield curve inversion lessening and swing to a positive shaped yield curve by year-end. For 10-2yr this process will likely be clearer in the U.S. for two reasons. Firstly, Fed Funds is more divergent from neutral policy rates than in the EZ, bu
January 18, 2024 10:15 AM UTC
The more subdued profile of Japanese wages, plus a delay in the 1st BOJ hike, has prompted us to lower the forecast of a rise in 10yr JGB yields in 2024 – though we still see a rise above 1% (Figure 1). As BOJ tightening stops, we see 10yr JGB yields falling back again in 2025.
January 15, 2024 8:49 AM UTC
The DPP have won the Taiwan presidential election. However, the DPP has lost its majority in parliament, while the 3rd party (Taiwan People Party (TPP) are signalling they will not form a coalition with (Kuomintang) KTT. This will restrain the DPP. However, China will still likely show its dis
December 27, 2023 1:23 PM UTC
Figure 1: Pct of USD in Allocated FX Reserves
Source: IMF COFER/Continuum Economics
The latest IMF COFER data (here) shows that the USD still remain the dominant currency among central banks, with the Euro in 2nd place at 19.6% followed by the Japanese Yen and British Pound. The Chinese Yuan i