FOMC Preview For May 1: Signaling Concern on Inflation, Tapering Quantitative Tightening

April 25, 2024 7:04 PM UTC

Bottom Line: The FOMC meets on May 1 and rates look sure to remain at the current 5.25%-5.50% target range. The statement is likely to see some adjustments to reflect recent disappointment on inflation while repeating that more confidence on inflation moving towards target is needed before easing. I

BoJ's Intervention and its impact

April 25, 2024 6:24 AM UTC

In the period of time when JPY significantly weakens or strengthens, BoJ will intervene in the FX market either through verbal or actual intervention. As JPY weakened significantly in the past months, once again we found ourselves in the proximity of FX intervention with unknowns for anonymity is ke

Bank of Canada Minutes Look to Gradual Easing, Divided on When to Start

April 24, 2024 6:44 PM UTC

Bank of Canada minutes from the April 10 meeting confirm a greater confidence on inflation falling, though there is disagreement within the Governing Council over when policy easing will become appropriate. There was agreement that easing would probably be gradual given the risks to the outlook and

EZ HICP Preview (Apr 30): Core Disinflation Signs to Flatten Out Further?

April 23, 2024 9:43 AM UTC

Very much having affected ECB thinking, there has been repeated positive EZ news in the form of falling EZ HICP inflation and somewhat broadly so. This continued in the March HICP numbers, with the 0.2 ppt drops in both headline and core being a notch more sizeable than most anticipated. Regardless,

Short-end European Government Bonds Following U.S. But June Decoupling

April 22, 2024 1:15 PM UTC

The Fed’s shift to higher for longer has spilled over to drag European government bond yields higher through April.  This now looks overdone as a June ECB rate cut is not fully discounted and ECB officials/data clearly point towards a 25bps cut.  UK money markets are more out of line, with a Jun

UK: Services Inflation Resilience – An Alternative Perspective?

April 22, 2024 10:03 AM UTC

Although still with three members openly resistant to cutting Bank Rate, it does seem as if an MPC majority is nevertheless edging toward easing policy conventionally.  This reflects a view among the less hawkish and more pliable MPC members that risks to persistence in domestic inflation pressures

U.S. Fed's Goolsbee - Three months of inflation data can't be dismissed

April 19, 2024 6:17 PM UTC

U.S. Fed's Bostic - No need to ease if labor market stays strong

April 18, 2024 4:21 PM UTC

U.S. Fed Beige Book Summary - Similar tone to last report

April 17, 2024 6:14 PM UTC

The latest Beige Book has a similar tone to that of March 6, if slightly stronger on activity, while seeing some easing of labor market tightness but little change in inflationary pressure.

UK CPI Inflation Review: Inflation Fall Further, But Services Momentum Still Evident

April 17, 2024 6:52 AM UTC

UK headline and core inflation have been on a clear downward trajectory in the last few months, the former having peaked above 10% in February last year and the latter at 7.1% In May. After a pause in the preceding three months, this downtrend seemingly resumed in the February CPI numbers and clearl

U.S. Fed's Williams - Optimistic and not very hawkish

April 15, 2024 1:09 PM UTC

U.S. Fed's Schmid - Reason to think rates will stay higher for longer

April 12, 2024 7:40 PM UTC

Hawkish remarks from Schmid are probably the most notable of today's Fed talk, with Collins, Goolsbee and Bostic all maintaining the tone of recent comments.

UK GDP Review: Less Fragile Recovery to Fuel BoE Hawks?

April 12, 2024 6:50 AM UTC

The economy may have been in only mild recession in H2 last year, but the ‘recovery’ now evident is hardly much better with GDP growth only modestly positive.  Admittedly, coming in as largely expected, and despite industrial action, GDP rose by 0.1% m/m in February accentuating the upgraded 0.

ECB Review: ECB Hums Easing Tune for June

April 11, 2024 1:58 PM UTC

Surprising hardly anyone, the ECB is preparing to cut official rates, after what are now five successive stable policy decisions. It explicitly suggested that it could be appropriate to reduce the current level of monetary policy restriction, a policy hint backed up by dropping its previous rhetoric

How Durable are Better UK Housing Market Signs?

April 11, 2024 9:45 AM UTC

Amid some mixed remarks from one the MPC hawks, the BoE will be noting more positive housing market signs.  The latest RICS survey very much points to a clear pic-up in housing demand, something that chimes with the results in the just-published BoE Credit Conditions Survey (CCS), which also sugges

Tone of FOMC Minutes From March 20 is Not Hawkish

April 10, 2024 6:54 PM UTC

FOMC minutes from March show little sign of disagreement and the tone is not hawkish, with participants expecting both inflation and the economy to slow, and there being a clear majority view that the pace of balance sheet reduction should soon be trimmed.  Optimism on inflation is however cautious

Eurozone Banks See Company Loan Demand Slump as ECB Unconventional Tightening Bites Further

April 9, 2024 9:22 AM UTC

While there may be few positive straws in the wind in the latest (April) 2024 bank lending survey (BLS), the ECB should fund the balance of results still troubling.  Company credit demand slumped afresh amid rising interest rates and deferred capex plans.  Admittedly, credit supply to firms tighte

UK CPI Inflation Preview (Apr 17): Inflation to Fall Broadly Further, But Momentum Still Evident

April 8, 2024 2:12 PM UTC

The economy may have been in only mild recession in H2 last year, but the ‘recovery’ now evident is hardly going to feel much better with GDP growth hardly positive.  Admittedly, coming in as largely expUK headline and core inflation have been on a clear downward trajectory in the last few mont

U.S. Fed's Barkin - Jobs report quite strong

April 5, 2024 1:59 PM UTC

Could FOMC Minutes From March 20 Appear More Hawkish Than Powell?

April 4, 2024 6:55 PM UTC

FOMC minutes from March 20 are due on April 10.  Powell’s press conference at that meeting and his subsequent comments have been relatively dovish, downplaying recent strong data though he has also sounded in no hurry to ease. The minutes may show a significant minority expressing greater concern

ECB Preview (Apr 11): Still the Focus on Words Not Deeds – For Now!

April 4, 2024 12:22 PM UTC

As has been the case for several times now, the ECB meeting verdict due next Thursday (Apr 11) will be notable not for what the Council does but rather what is said just as at the March meeting whose minutes were released today.  A fifth successive stable policy decision is very much expected, albe

UK GDP Preview (Apr 12): Fragile Recovery?

April 3, 2024 1:26 PM UTC

The economy may have been in only mild recession in H2 last year, but the ‘recovery’ now evident is hardly going to feel much better with GDP growth hardly positive.  Admittedly, coming in as largely expected, and despite industrial action, GDP rose by 0.2% m/m in January more than reversing th

EZ HICP Review: Core Disinflation Flattening Out?

April 3, 2024 9:34 AM UTC

Very much having affected ECB thinking, there has been repeated positive EZ news in the form of falling inflation and somewhat broadly so. This continued in the March HICP numbers, with the 0.2 ppt drops in both headline and core being a notch more sizeable than most anticipated. Regardless, the hea

March Outlook: Europe in Focus, Then Elections Around the World

April 3, 2024 9:00 AM UTC