Economic activity slowing and inflation weakening faster than anticipated However, labour market still very tight and services inflation still accelerating Bank to hike to 4.35% next week, but September rate hike is a close call With inflation …
26th July 2023
Overview – Global inflation has almost halved since September last year and this trend has further to run. Admittedly, the fall in headline inflation so far mainly reflects the drag from lower energy price inflation, which has almost run its course. But …
25th July 2023
Bank will revise up 2023 inflation forecast Early signs that virtuous cycle between wages and prices has finally arrived However, widening of tolerance band would risk renewed bond market sell-off At the upcoming meeting, the Bank of Japan will revise …
21st July 2023
ECB looks certain to raise the deposit rate to 3.75% next week. The September decision will be a close call but another 25bp looks most likely. President Lagarde will stress that rates will remain at the peak for a long time. There is little doubt that …
20th July 2023
25bp rate hike next week likely to be the last, with rates peaking at 5.25%-5.50% Run of better inflation data to convince Fed to scrap plans for further hikes Falling inflation and weaker economy will see rates cut to 3.25%-3.50% by end-24 Fed officials …
19th July 2023
Economy and housing market enjoying renewed momentum Core inflation pressures easing but still too strong for comfort Loosening labour market means Bank unlikely to raise rates above 5.0% Note: We’ll be discussing the Canadian economic and policy outlook …
5th July 2023
RBNZ will leave rates unchanged next week With economy in recession and inflation expectations falling, tightening cycle is over But resilient labour market conditions will delay rate cuts until early-2024 Having raised rates more aggressively than any …
Labour market still very tight and unit labour cost growth surging Inflation plunged in May but underlying measures moderating less rapidly Bank will deliver 25bp rate hikes at each of its next three meetings While headline inflation plunged in May, …
28th June 2023
Policymakers are likely to raise the policy rate by 50bp to 2% next Thursday, despite inflation falling sharply this year. And SNB Chairman Thomas Jordan’s view that Switzerland’s neutral interest rate might be around 2% suggests that there will be …
15th June 2023
Bank of England likely to raise interest by 25 basis points next Thursday, from 4.50% to 4.75% The recent persistence of inflation supports our view that rates will rise to a peak of 5.25% Rate cuts remain a distant prospect The recent persistence of …
The latest OPEC oil market report confirms that OPEC countries implemented a fresh round of voluntary production cuts in May, slashing the group’s crude output by 0.4m bpd. Similar to OPEC’s own view on the oil market, we think that it will tighten …
13th June 2023
The latest OPEC oil market report confirms that OPEC countries implemented a fresh round of voluntary production cuts in May, slashing the group’s crude output by 0.4m bpd. Similar to OPEC’s own view on the oil market, we think that it will tighten later …
Ueda resolutely dovish despite continued strengthening of price pressures Yield Curve Control here to stay at least until conclusion of review next year Inflation set to fall sharply next year which will make it difficult to abandon YCC The Bank of …
9th June 2023
ECB almost certain to raise interest rates by 25bp next week. And likely to have a bias towards further tightening. We expect Lagarde to emphasise that policy will remain tight for a long time. A 25bp interest rate rise next week, taking the deposit …
8th June 2023
June pause to be followed by July hike, taking rates to a peak of 5.25%-5.50% Labour market resilience means we now don’t expect rates to be cut until Q1 next year Fed funds target range to fall to 2.75%-3.00% by end-2024 There appears to be enough …
7th June 2023
Oil output will be more constrained in the second half of this year if the OPEC+ members stick to their recently-announced production quotas. However, we have also raised our forecast of Russian production given the persistent strength in its exports. As …
5th June 2023
OPEC+ is unlikely to change its output target at the meeting this Sunday. After all, crude supply is already constrained, but prices have fallen on demand concerns. Accordingly, it is unlikely that further cuts would prompt a large rebound in prices. …
1st June 2023
MPC to keep rates on hold next week Slower growth and inflation could mean MPC is laying groundwork for cuts before long Consensus has come round to our view that rates will be cut in early 2024 We think the MPC will keep policy unchanged at the …
Inflation and GDP growth have surprised to the upside since April meeting Housing turnaround an upside risk to inflation and inflation expectations Progress on US debt ceiling deal means little reason to wait until July before hiking As GDP growth and CPI …
31st May 2023
Economy softening, but not collapsing Inflation overshooting Bank’s forecasts and upside risks abound We now expect two more 25bp hike in June and July; rate cuts unlikely until Q2 2024 With inflation set to overshoot the Reserve Bank of Australia’s …
The RBNZ will lift its OCR by 25bp next week. With upside risks to inflation persisting, we’ve pencilled in another 25bp hike in July. However, we still think the Bank will pivot to rate cuts by year-end. The latest data don’t tell a compelling story as …
17th May 2023
OPEC crude oil production declined in April due to export disruptions in Iraq. Production should fall even further in May when OPEC+ output cuts come into effect. Elsewhere, the easing of some US sanctions on Venezuela should mean production there rises …
11th May 2023
Will 4.50% be the peak? Markets and economists have come round to our view that rates will rise to 4.50% 4.50% may well be the peak Risk is that resilient economy and sticky inflation prompt rise to 4.75% or 5.00% With the financial markets and other …
4th May 2023
ECB most likely to raise its deposit rate by 50bp next week. Hawks can point to strong activity, high core inflation and tight labour market. We forecast the deposit rate to hit 4% and stay there for over a year. While it is not a done deal, we think the …
27th April 2023
We expect the Norges Bank to follow through on its plan to raise its policy rate by 25bp next week, to 3.25%. We have pencilled in a peak of 3.5% in June but the risks are skewed towards it reaching a higher level, particularly if the krone keeps falling …
25bp hike next week likely to be the last, with rates peaking at 5.00%-5.25% Economic weakness and falling inflation to prompt rate cuts later this year We expect fed funds target range to have fallen to 2.50%-2.75% by end-2024 The Fed looks set to …
26th April 2023
Table of Key Forecasts Overview – Headline inflation looks set to fall sharply as energy effects subside and the let-up in product shortages reduces goods inflation further. We also expect services inflation to decrease as demand weakens, allowing …
Inflation moderating, but still far too strong to be consistent with RBA’s target Further tightening needed to return inflation to target by mid-2025 Rate cuts will start a bit later than most expect; our forecast is Q2 2024 Note: We’ll be discussing the …
Note: We’ll be discussing the BOJ’s April decision and the fate of YCC in a 20-minute online briefing at 09:00 BST/16:00 SGT on Friday, 28th April . Register here . GDP growth falling short of expectations, but price pressures increasingly broad-based …
21st April 2023
The Riksbank will raise its key policy rate by another 50bp next week, bringing it to 3.5%, and we think a final 50bp increase is most likely in June. Policymakers sounded pretty hawkish at the February meeting and incoming data since then have …
19th April 2023
Forecasts unchanged, lower production will support prices Despite justifying its recent production cuts on an uncertain demand outlook, OPEC did not make any changes to its 2023 global GDP or oil demand forecasts in its monthly report for March. We think …
13th April 2023
Inflation has fallen faster than Bank expected Probably too soon for Bank to drop its bias toward further rate hikes New neutral policy rate estimate could move long-run rate expectations The recent banking turmoil in the US means the Bank of Canada may …
5th April 2023
Central banks focused on inflation for now, but will monitor credit in the months ahead Conditions were already tightening before recent turmoil… …and by Q3, lending surveys and spending data will show clear signs of strain Central banks are now in a …
Hike to repo rate (to 6.75%) next week will likely be last in the cycle Slower growth and inflation could mean MPC is laying groundwork for cuts before long Consensus coming round to our view that rates will be cut in early 2024 With the turmoil in the …
30th March 2023
The RBNZ will temper rate rises, but continue hiking to 5.25%. The Bank will look past the disruption to activity driven by Cyclone Gabrielle. Even so, recession-induced disinflation will pave the way for rate cuts by year-end. With the latest economic …
29th March 2023
RBA has signalled that it will consider pausing its tightening cycle next week On balance, the economic data are consistent with a pause Final 25bp rate hike in May to be followed by cuts in Q2 2024 The RBA has signalled a pause in its tightening cycle at …
Commodity markets were not spared the effects of widespread turmoil in the global banking system. Most prices ended the week lower as investors fled risky assets. The gold and silver prices bucked this trend and surged higher; unsurprising in a week …
17th March 2023
We don’t think the collapse of SVB, problems at Credit Suisse and volatility in markets will deter the Norges Bank from raising its policy rate by 25bp next week, to 3.0%. If anything, the risks are skewed towards a 50bp hike. And we think the policy rate …
We think the SNB will push ahead with rate hikes despite the Credit Suisse crisis, and raise the policy rate by 50bp to 1.5% next Thursday. By its own exacting standards, inflationary pressures in Switzerland are acute with core inflation reaching its …
16th March 2023
Close call, but if the situation doesn’t deteriorate further we think there will be a 25bps hike Beyond that, fading of banking worries and stronger data required for more hikes Markets may be underestimating how far interest rates will be cut next year …
Fed has difficult decision to weigh financial stability needs against inflation target. On balance, we think the Fed will still push ahead with a 25bp hike. But inevitable pull-back in bank lending means Fed should be cutting before year-end. The Fed …
15th March 2023
OPEC sticks together and will keep output constrained OPEC’s monthly report for March noted that the group has stuck to the production targets agreed in October last year. Accordingly, we have revised down our forecasts for the group’s output in 2023. The …
14th March 2023
50bp hike looks a done deal. New guidance likely to explicitly point to higher for longer policy rates. No more news on QT next week, but we expect it to accelerate in July. We expect the ECB to raise interest rates by 50bp next week and accompany that …
9th March 2023
Bank under political pressure to abandon Yield Curve Control as inflation surges Incoming Governor Ueda seems to have been given a mandate to end the policy However, existing Governor Kuroda may well spring one last surprise Yield Curve Control is on …
3rd March 2023
Encouraging signs in January CPI and economy has slowed sooner than expected But labour market still tight and wage pressures too strong Risk of higher interest rates elsewhere also keeps pressure on the Bank The fall in CPI inflation in January and …
1st March 2023
Data a touch softer than expected, but not soft enough for RBNZ to back away We still expect rates to peak at 5.5% by the middle of this year Looming recession will prompt looser policy by year-end The incoming data have been a touch softer than the RBNZ …
15th February 2023
Output still below quota, demand will be key OPEC’s monthly report for February did not make any major revisions to its forecasts. That said, the group is clearly worried about both the outlook for global demand and supply from Russia. We think OPEC is …
14th February 2023
Markets’ focus shifting to forward guidance as pace of rate hikes slows Any hints of an end to tightening cycles are still strongly data-dependent But the data will allow for rate cuts sooner than many central banks now imply Now that inflation has …
8th February 2023
MPC to mark end of tightening cycle with 25bp hike to repo rate (to 6.50%) next week Slower growth and inflation could mean MPC is laying groundwork for cuts before long Rate cuts to materialise in early 2024, sooner than consensus expects With …
2nd February 2023
With inflation and price pressures still high, the Riksbank will probably raise interest rates by 50bp next week. However, in contrast to the market, we think this will probably end the tightening cycle and are bringing forward our forecast for a first …
