Australia & New Zealand Economics Weekly Australian economy braces for more pain The RBA's hawkish turn has led us to revise up our forecast for the peak cash rate to 4.85%, from 4.35% previously. The resulting rise in mortgage rates means that housing affordability will soon... 9th June 2023 · 6 mins read
Bank of Japan Watch Yield Curve Control here to stay The Bank of Japan has kept sending dovish signals in recent weeks and our view remains that it won’t make major policy changes this year. And we doubt that the upcoming review will show a compelling... 9th June 2023 · 8 mins read
ECB Watch At least one, and probably two, more 25bp hikes to go A 25bp interest rate rise next week, taking the deposit rate to 3.5%, looks like a done deal. We think that the ECB will also hint at a likely 25bp increase at the meeting in July and will emphasise... 8th June 2023 · 9 mins read
Emerging Markets Economics Update Lessons from the “early hikers”: inflation remains sticky A handful of EM central banks were quick out of the blocks to tighten monetary policy in 2021 and one of the key lessons of the past year or so is that underlying inflation pressure is still proving... 8th June 2023 · 5 mins read
Latin America Economic Outlook Rate cuts coming, but easing will be gradual The region’s strong start to the year is unlikely to be sustained and we expect growth across Latin America to come in weaker than most expect this year and next. Inflation will continue to fall, but... 8th June 2023 · 21 mins read
Latin America Rapid Response Mexico Consumer Prices (May) Headline inflation in Mexico dropped to a 21-month low of 5.8% y/y in May and will continue to decline over the coming months. That said, the strong labour market and rapid wage growth mean that... 8th June 2023 · 2 mins read
India Economics Update Next move in policy rates likely to be down The RBI’s decision to keep the repo rate on hold (at 6.50%) today comes as no surprise given the recent sharp drop in inflation. The central bank continues to strike a hawkish tone and the door... 8th June 2023 · 3 mins read
US Fed Watch Higher for longer There appears to be enough support on the FOMC for a pause at next week’s meeting, but the statement and new projections will make clear that this is not the end of the hiking cycle. We now expect... 7th June 2023 · 8 mins read
Canada Economics Update Bank resumes hikes and probably another to come The Bank of Canada’s 25bp interest rate hike today is unlikely to be the last, with the rapid turnaround in the housing market and concerning underlying inflation dynamics raising the case for at... 7th June 2023 · 3 mins read
Global Economics Update Resilient interest sensitive activity indicators won’t last According to our proprietary interest rate-sensitive indicators, activity in advanced economies has so far proven remarkably resilient to higher interest rates. A lot of this has been due to a rebound... 7th June 2023 · 4 mins read
Event Drop-In: Unpacking the Fed, ECB and BoE June meetings 1686837600 What will major advanced economy central banks decide at their June meetings, and how will those decisions be messaged?
Europe Economics Update TLTRO redemptions to reduce banks’ liquidity More than €1trn of TLTROs will be redeemed over the next eighteen months, significantly reducing euro-zone banks’ liquidity and pushing up their funding costs as they adjust their balance sheets... 7th June 2023 · 5 mins read
Latin America Rapid Response Brazil IPCA (May 2023) The fall in Brazilian inflation to 3.9% y/y in May, alongside the government’s new fiscal framework, has strengthened the arguments in favour of near-term monetary easing. But with inflation set to... 7th June 2023 · 2 mins read
Emerging Europe Economics Update Turkey needs a significant adjustment in the lira Signs that newly re-elected Turkish president Erdogan is willing to move away from unorthodox economic policies has led to an increase in investor optimism towards his country. These developments are... 7th June 2023 · 4 mins read
