Tolerance band around 10-year yield target unlikely to be widened any further Bank has started to reduce its JGB purchases ETF purchases will be resumed during periods of market turmoil After tweaking a range of policy measures in March, the Bank of Japan …
20th April 2021
Bank will stress that the recent increase in inflation is likely to prove temporary. Lagarde to say many indicators are considered in assessing “financing conditions”. Weekly PEPP purchases and bond yields will be broadly unchanged in coming months. After …
15th April 2021
Economy outperforming the Bank’s January forecasts Bank to slow pace of asset purchases GDP forecasts to be revised higher, but timing of first interest rate hike still in 2023 The Bank of Canada is set to cut the pace of its asset purchases next week. …
14th April 2021
OPEC oil production to increase in earnest from May OPEC oil production rose a touch in March. We expect that the group’s production will hold steady throughout April, as existing quotas remain in place, but that it will increase thereafter as quotas are …
13th April 2021
RBNZ should shrug off second technical recession and keep policy unchanged The Bank’s new house price focus shouldn’t change the policy outlook We still expect the RBNZ to hike rates in 2022 New Zealand has probably experienced a second technical …
7th April 2021
RBA will remain committed to its bond yield target And should extend QE once more in June Market too bullish on rate hikes In recent weeks, the Reserve Bank of Australia has continued to push back against expectations of monetary tightening. We think the …
31st March 2021
Mandates have spread into equality, climate change and house prices in recent months Implications are mixed; Fed lower for longer, but RBNZ may need to hike sooner On average, mission creep points to more variable and probably higher future inflation …
29th March 2021
Several EM central banks have hiked policy rates in recent weeks… …but risks to India’s economic recovery mean the RBI is unlikely to follow suit Inflation target likely to remain unchanged for the next five years EM monetary policy has turned decidedly …
The cut to Nornickel’s production guidance will support a higher price for palladium But ultimately, demand-side factors are why we think it will outperform platinum We expect the palladium price to rise a touch, but the platinum price to drop back In …
24th March 2021
Table of Key Forecasts Overview – Inflation will rise sharply in every major economy in the months ahead, driven by a rebound in energy inflation, tax changes, and supply shortages. On average, CPI inflation in the advanced economies looks set to rise …
19th March 2021
The Swiss National Bank will have cheered on the recent fall in the franc against the euro. However, policymakers are unlikely to offer up any surprises at the policy announcement next Thursday. Given that the SNB last changed interest rates in January …
18th March 2021
The Norges Bank will probably leave its key interest rate on hold at zero next Thursday, but we expect it to adopt a much more hawkish tone than it has up to now. It might also announce a re-tightening of macroprudential policy to try to counter momentum …
11th March 2021
Saudi Arabia’s voluntary cut to keep OPEC production constrained Saudi Arabia’s 1m bpd voluntary production cut meant that OPEC oil production plummeted in February. We expect OPEC production to remain low in March and April as Saudi Arabia continues its …
MPC won’t respond to higher gilt yields by stepping up the pace of its QE purchases But it will reiterate its guidance that rates will remain unchanged for a long time The change to the MPC’s remit may alter the composition of bond purchases, but not the …
Board acknowledges that bond market functioning has deteriorated But policymakers may be worried about impact of higher yields on activity Tolerance band to remain unchanged until vaccines allow activity to rebound fully The pendulum seems to have swung …
Fed will not sound the alarm about rising bond yields Officials will revise up GDP and inflation forecasts in light of $1.9trn fiscal stimulus… …but projections could still signal rates on hold through end-2023 We expect the Fed to leave policy unchanged …
10th March 2021
Policymakers will stress that inflation likely to be below target in medium term. Christine Lagarde may make another effort to clarify the ECB’s “reaction function”. We suspect the Bank will ultimately step up PEPP purchases a bit in coming weeks. At next …
4th March 2021
Economy has outperformed the Bank’s forecasts But output still far from potential and Bank emphasising need for inclusive recovery Bank to push back against expectations it will raise rates in 2022 Although the economy has been stronger than expected, we …
3rd March 2021
China has ramped up its imports of agricultural commodities since mid-2020 Alongside investor speculation, this has helped push prices to multi-year highs But we expect Chinese imports to taper off this year, which will weigh on prices In this Commodities …
26th February 2021
The financial markets have started to price in a rate hike as soon as early-2023 Labour market tightening but wage growth and inflation set to fall short of RBA’s targets We expect the first rate hike to be delayed until early-2024 and bond yields to fall …
24th February 2021
India’s oil consumption looks set to grow in the years ahead But the rate of growth will depend on how aggressively ‘green’ policies are pursued And any additional demand for oil will have to be met almost entirely by imports In this Energy Watch , we …
23rd February 2021
Economic rebound means the RBNZ done easing The Bank has already slowed the pace of asset purchases We expect the Bank to end quantitave easing this year before hiking rates in 2022 Economic data since the Bank’s last meeting have shown the New Zealand …
17th February 2021
OPEC production increase to be short lived The slight easing of quotas meant that OPEC oil production rose in January. However, output will fall back again this month as Saudi Arabia implements its 1m bpd of voluntary production cuts . The OPEC Monthly …
11th February 2021
Strong Chinese demand has fuelled a rally in commodity prices But history suggests that prices will fall back as stimulus is withdrawn That said, the “greening” of the global economy is a medium-term positive for metals The latest rally in many commodity …
8th February 2021
Our forecasts assume that virus-related travel restrictions will be relaxed in H2 2021 But further setbacks on the virus front could mean that restrictions are kept in place That said, there are reasons to believe oil prices would hold up even in such a …
4th February 2021
Taper talk is premature and purchases typically won’t slow until next year There is absolutely no rush for central banks to shrink their balance sheets But when they do, the process will require some creative thinking Talk of tapering in recent weeks has …
The Riksbank is highly likely to leave its repo rate and other policy settings on hold next Wednesday (10 th February), but we expect it to beef up its asset purchase programme again before long. Recall that the Riksbank left its repo rate unchanged at …
3rd February 2021
Bank to emphasise it is willing to provide more support and has the tools to do so But there is a lot of QE already in the pipeline and we doubt it’s ready to use negative rates Our relatively optimistic economic forecasts suggest it won’t need to either …
28th January 2021
Consensus is for rates to remain on hold next week But we think sharp drop in inflation could trigger a 25bp policy rate cut We also doubt expectations of rate hikes over the next 12-18 months will materialise Financial markets and analysts appear …
27th January 2021
RBA may choose to keep up with large asset purchases by overseas central banks But labour market doing much better than Bank had anticipated Balance of financial stability risks starting to shift as credit growth set to surge While the Reserve Bank of …
Policy settings & guidance will be left unchanged Vaccinations & additional fiscal relief shift debate towards tapering asset purchases Fed won’t taper until 2022, but may pre-announce plans around Jackson Hole Aside from acknowledging the weakness in the …
20th January 2021
Governing Council under no pressure to loosen policy further… …but will commit to keeping financial conditions loose for as long as needed. Main risk is that the lockdowns are extended well into the second quarter. Having adjusted their policy settings in …
14th January 2021
OPEC production to increase in January, but fall later in the quarter OPEC’s oil production rose in December and is likely to pick up again this month in line with its higher quotas. However, the group’s total output will almost certainly fall in February …
The Norges Bank will almost certainly leave its key interest rate on hold at zero next Thursday, but there is an outside chance that it could start to re-tighten macroprudential policy to tame the housing market. Having slashed the policy interest rate by …
No signs of stress in financial markets and policy already extremely loose Bank has already started to address side effects of aggressive easing Upcoming review still shrouded in mystery The Bank of Japan is unlikely to respond to the worsening virus …
Speculation that Bank could cut interest rates looks overdone. Bank set to upgrade its GDP forecasts. Macklem faces communications challenge as Bank attempts to keep yields low. The Bank of Canada is set to upgrade its growth forecasts next week, despite …
13th January 2021
Table of Key Forecasts Overview – Energy price base effects will drive up inflation in the first half of 2021, but central banks will look through this. Indeed, in most cases, inflation should be around or below target over the second half of 2021 and …
17th December 2020
Weaker oil demand forecast could lead to lower OPEC+ supply in Q1 OPEC cut its 2021 oil demand forecast in its latest report, which we suspect could delay further easing of its production cuts early next year. This should help put a floor under prices . …
14th December 2020
We do not expect the Swiss National Bank or the Norges Bank to throw up any festive surprises at their final policy announcements of the year next Thursday (17 th December). Vaccines point to brighter times next year, but we still think that both will …
10th December 2020
Vaccines mean the recovery may not need a further monetary boost But monetary policy will remain extremely loose for years yet And a no deal Brexit could yet prompt further easing The next Monetary Policy Committee (MPC) meeting on Thursday 17 th December …
Recovery has surprised to the upside but third wave is a downside risk Bank to extend emergency lending facility New facility to support regional banks highlights discomfort with negative rates With the ongoing wave of infections in Japan the most severe …
Officials unconvinced of need for, or benefits of, further stimulus But guidance on asset purchases is set to be updated Strength of rebound in inflation next year could catch the Fed off-guard We expect the Fed to keep its main policy settings unchanged …
9th December 2020
We think that OPEC+ production will rise by less than the new agreement allows. Some countries will make compensatory cuts, while weak Q1 demand could prevent monthly rises in February and March . Last Friday, OPEC+ announced that would increase output by …
7th December 2020
The Bank will play down the chances of a quick return to economic health. We expect it extend the PEPP until at least mid-2022 and announce more TLTROs. But the Governing Council will probably leave the deposit rate unchanged. Policymakers at the ECB have …
3rd December 2020
Bank was already assuming sizeable economic hit from new waves of the virus. So unlikely to loosen policy amid recent restrictions, despite hints it could do more. Vaccine news and new fiscal plan present upside risks to Bank’s longer-term forecasts. The …
2nd December 2020
No change in policy this week given high inflation Markets are pricing in modest hikes within the next 12-18 months In contrast, we think rates will remain at current level or drop further We agree with financial markets and the consensus that India’s …
30th November 2020
We expect OPEC+ to extend its current 7.7m bpd supply cuts for at least another three months at its next meeting. Although prices have rallied in recent weeks on hopes of a faster recovery in demand, output restraint will still be needed to avoid …
27th November 2020
Central banks keen to bridge a difficult period before vaccines are rolled out… … and reduced fiscal stimulus shifts onus of supporting recovery to monetary policy The legacy of the virus will warrant rock bottom interest rates for several years The …
25th November 2020
Vaccine may be available by Q2 2020, allowing full reopening of the economy Labour market doing much better than Bank had anticipated Case for additional stimulus is diminishing The Reserve Bank of Australia won’t make any policy changes at its meeting on …
24th November 2020
