Global Inflation Watch is our in-depth quarterly guide to how price pressures are developing across advanced and emerging economies. This exclusive publication includes insight into how traditional sources of inflation are contributing to the current …
11th October 2021
Natural gas prices have soared and are likely to remain historically high for some time But there has not been an underlying structural shift up in demand And high prices will incentivise supply At the time of writing, global natural gas prices are …
1st October 2021
Concerns that price pressures will become sustained have prompted a hawkish shift. We have brought forward anticipated rate hikes in the US, UK and some EMs. But we doubt that tightening will go as far as most central banks have implied. There has been a …
29th September 2021
RBI likely to keep rates on hold next week as inflation pressures eases Admittedly, some liquidity draining measures could be announced… …but these are likely to be marginal tweaks rather than signs of policy tightening Policy rates are highly likely to …
New Zealand has eased its strict lockdown RBNZ still keen to lift rates in October Rates will be gradually raised to 1.50% by the middle of next year New Zealand has slowed the spread of the Delta variant and eased its lockdown, which stopped the RBNZ …
Labour market should cope well with impact of lockdowns Slump in net migration means that staff shortages won’t ease soon Wage growth still set to accelerate next year, paving way for rate hikes in early-2023 With the latest lockdowns set to end next …
28th September 2021
While the Swiss National Bank is set to leave interest rates on hold yet again next Thursday, the Norges Bank will finally pull the trigger on its tightening cycle. Given the backdrop of global risks such as the Delta variant and supply issues, we suspect …
16th September 2021
MPC’s position that interest rate hikes are on the horizon won’t have changed But the weak near-term growth outlook means that a rate rise is unlikely soon We think that Bank Rate will remain unchanged at 0.10% until 2023 The Monetary Policy Committee …
LDP leadership favourite Kono Taro may set his sights on shrinking BoJ balance sheet Next PM likely to be involved in choosing Governor Kuroda’s successor Both short- and long-term policy rates won’t be touched any time soon Dug in for an extended hold, …
Fed may signal – but not formally announce – taper will begin later this year Weaker incoming data will help keep rates on hold until 2023 New 2024 forecasts will provide important clues to Fed’s reaction function We think the sharp slowdown in employment …
15th September 2021
The momentum in the Swedish economy, and jump in inflation in August, gives the Riksbank plenty to ponder at next week’s policy meeting. While repo rate hikes are not on policymakers’ agenda, the reduced risk of disinflationary pressures lends support to …
14th September 2021
Mounting pressure on OPEC may prompt faster unwinding of output cuts The rise in OPEC’s oil output fell well short of its target in August. And given a higher oil demand forecast for 2022, alongside growing external pressure, we think that the risks are …
13th September 2021
ECB likely to signal that it will reduce its weekly PEPP purchases in the months ahead. But we think it will leave interest rates unchanged until beyond 2025. The Bank will also nudge up its inflation and growth forecasts for this year. The ECB is likely …
2nd September 2021
GDP unexpectedly contracted in second quarter, and probably again in July. Bank to wait until October at the earliest to taper again. Guidance on policy rates set to be unchanged. The unexpected contraction in second-quarter GDP means the Bank of Canada …
1st September 2021
Acceleration in vaccine rollout means lockdowns unlikely to last much longer RBA will probably press ahead with tapering However, Bank unlikely to tighten as early as next year as financial markets expect The health situation in Australia continues to …
We think that a few countries will join OPEC, which would boost its market power However, we still expect oil prices to fall over the next few decades … … as countries rush to produce as much as possible against the bleak demand backdrop In this Energy …
19th August 2021
OPEC may need to reconsider supply plans OPEC’s oil production soared in July as Saudi Arabia unwound the bulk of its voluntary output cut . Although OPEC left its demand forecast unchanged, we think that the near-term demand outlook has deteriorated, …
12th August 2021
The Norges Bank is set to leave interest rates on hold at zero next Thursday (19 th August), but it will almost certainly start to raise them, and tighten macroprudential policy further, in September. Recall that the Norges Bank left the policy interest …
The New Zealand economy is now overheating The RBNZ will hike rates by 50 basis points in August OCR may reach 1.50% by the middle of next year The New Zealand economy is clearly overheating and the Bank’s mandates for both inflation and the labour market …
11th August 2021
The MPC will probably revise up its near-term inflation forecasts. Only Saunders to break ranks to vote in favour of an early end to the Bank’s net asset purchases. The MPC is unlikely to signal interest rate hikes are getting closer. While the Bank of …
29th July 2021
RBI likely to keep rates on hold next week as inflation pressure looks set to ease Central bank will underline its commitment to supporting the economic recovery Policy normalisation will happen only very gradually, and not until well into next year …
Sydney lockdown could set back the recovery in employment Bank to delay reduction in bond purchases from $5bn to $4bn to November However, we still expect QE to end in mid-2022, with first rate hike in early-2023 We expect the Reserve Bank of Australia to …
28th July 2021
Next week’s meeting unlikely to bring new guidance on asset purchases Tapering still on track to begin in early 2022; September announcement possible Rates to remain on hold until 2023 A few regional Fed Presidents are pushing for the Fed to begin …
21st July 2021
The OPEC+ agreement, signed yesterday, should help to stabilise oil prices and we expect Brent crude to trade in a narrow band of between $70 and 75 per barrel over next six months. But we expect Brent to fall into the $60-70 range in 2022 as more global …
19th July 2021
OPEC supply to continue rising, regardless of new quotas OPEC’s oil production increased sharply in June, primarily because Saudi Arabia continued to unwind its voluntary production cut. Output should rise further in July on the back of larger quotas, and …
15th July 2021
Governing Council will not change its key policy settings next week. However, it will amend its forward guidance to reflect its new, more dovish strategy. The new guidance will push back the likely timetable for any future rate hike. The ECB will set out …
Security holdings may edge down as JGB purchases are tapered further Near term inflation forecasts to be revised up Climate change funds likely to be interest-free but impact will be small At its July meeting we expect the Bank of Japan to outline that it …
9th July 2021
Economy has developed as expected, so Bank likely to announce further taper Bank to keep signalling interest rates on hold until at least second half of 2022 New measures of labour market slack may shed light on reaction function As it is widely …
7th July 2021
Economic recovery continues to beat RBNZ expectations Bank likely to end QE in the months ahead We expect the RBNZ to hike rates in May next year We doubt the RBNZ will adjust any policy settings when it meets next Wednesday 14 th July. However, as the …
High inflation has driven up rate expectations everywhere. But the inflation outlook is varied, and other aims will determine policy too. Norway and New Zealand will be first to tighten among DMs, others will delay. The rise in inflation and the question …
30th June 2021
Bank to move to flexible QE while keeping weekly pace of bond purchases at $5bn RBA expects wage growth to pick up slowly and gradually; we expect a faster rebound We expect the Bank to taper QE in November, with first rate hikes in early-2023 The Reserve …
29th June 2021
After last week’s hawkish shift by the Fed, and the erasure of any doubt about the start of hikes by the Norges Bank , the Riksbank may also pencil a rate hike into its projections next Thursday (1 st July). However, policy action will be centred on the …
24th June 2021
Global Inflation Watch is our in-depth quarterly guide to how price pressures are developing across developed and emerging economies. This exclusive publication includes insight into how traditional sources of inflation are contributing to the current …
21st June 2021
MPC to acknowledge stronger activity and inflation But it will probably continue to hint policy won’t need to be tightened until late in 2022 We think 2024 is more realistic, and that some QE will be unwound before interest rates rise Even though the …
17th June 2021
We expect both the Swiss National Bank and Norges Bank to leave interest rates on hold next Thursday. But while rate hikes by the SNB are many years away, a tightening cycle in Norway is edging closer. Given that the SNB last changed interest rates in …
11th June 2021
Application deadline for emergency lending facility to be extended to end of year Security holdings set to remain flat as shrinking TB holdings offset rising JGB holdings Bank may only purchase ETFs when stock market falls sharply At its June meeting we …
OPEC oil production to rise beyond July OPEC’s oil production increased sharply in May on the back of higher quotas and Saudi Arabia starting to phase out its voluntary production cut. Production will rise again in both June and July in line with higher …
10th June 2021
Fed to begin discussion of how asset purchases might eventually be tapered But disappointing payrolls suggest “substantial further progress” still some way off Surging inflation means Fed’s projections need a re-think Fed officials may finally begin …
9th June 2021
The ECB is likely to set the stage next week for a very gradual taper. It will probably end net PEPP purchases next March, but scale up the APP. No big forecast changes likely, but Bank will acknowledge the outlook is brighter. We think the ECB will tweak …
3rd June 2021
Recent economic weakness should be offset by stronger third quarter Tone of policy statement likely to be similar to April Bank may signal further reduction in asset purchases likely at the July meeting Inflation surpassed the upper limit of the Bank of …
2nd June 2021
RBI likely to keep rates on hold next week as second virus wave subsides However, recovery may be more gradual than last year as states reopen with caution As such, policy will stay loose for a long while yet We agree with financial markets and the …
27th May 2021
Dovish RBA set to extend asset purchases by another $100bn in July However, early signs that inflation is about to recover strongly We think RBA will start to lift interest rates in late-2023 The Reserve Bank of Australia will still sound dovish at the …
25th May 2021
RBNZ will tackle soaring house prices by restraining credit rather than raising rates However, economy should continue to recover towards tightening threshold We still expect the RBNZ to hike rates in 2022 While the Bank will acknowledge the new house …
19th May 2021
Biden’s infrastructure package is ambitious, but we doubt it will pass in its current form If it did pass, the impact on energy markets could be large But we doubt it would be too significant for industrial metals markets In this Commodities Watch , we …
14th May 2021
Compliance could start to slip later this year OPEC’s overall production was largely unchanged in April, as most producers remained disciplined. However, compliance could slip later in the year if we are right and there is a surge in demand . The OPEC …
11th May 2021
The Norges Bank is set to leave rates on hold at zero next Thursday, but the countdown to lift-off is ticking and tighter macroprudential policy to counter momentum in the housing market looms. Having slashed the policy interest rate by 150bps to a record …
29th April 2021
The MPC will probably revise up its economic forecasts But it will reiterate its guidance that rates will remain unchanged for a long time MPC likely to stop QE before the Fed and the ECB Given the better starting point and improving economic outlook, it …
Stronger labour outturns largely offset by Bank’s lower estimate of natural rate Inflation very weak and set to pick up only slowly We expect a third $100bn round of QE and first rate hike only by end-2023 The Reserve Bank of Australia will revise down …
28th April 2021
FOMC statement likely to strike more optimistic tone… …but Powell to emphasise that policy changes are still some way off Asset purchase taper unlikely until next year with rates on hold until late-2023 We expect the statement following next week’s FOMC …
21st April 2021
The Riksbank is all but certain to leave its repo rate on hold next Tuesday (27 th April), and will stick to the plan to spend the entire SEK 700 billion asset purchase envelope by the end of the year. The stage is set for a prolonged period of policy …
20th April 2021
