Global Markets Update Two points on “higher for longer” and asset markets With much of the global economy holding up surprisingly well and inflation not coming down as quickly as expected, investors are weighing up the risk that policy rates remain elevated for much longer... 3rd March 2023 · 5 mins read
Europe Economics Weekly QT launched, France flatlining? The latest data suggest that France’s economy is performing a little better than Germany’s and may even avoid recession, at least in the first half of this year. Meanwhile, we expect to learn next... 3rd March 2023 · 8 mins read
Bank of Japan Watch Yield Curve Control could be abandoned this month Yield Curve Control is on counted time and the key question is not if but when it will be abandoned. The Bank could wait until Kazuo Ueda becomes Governor in April. But given that this risks another... 3rd March 2023 · 8 mins read
Capital Daily Three points on the latest rise in government bond yields Stronger-than-expected inflation and activity data have fuelled a further rebound in developed market (DM) government bond yields, posing upside risks to our policy rate forecasts. Even so, we think... 2nd March 2023 · 6 mins read
Emerging Markets Economics Focus Assessing the inflation threat from EM labour markets Labour markets look very tight in Central Europe and a handful of other EMs (particularly in Latin America), and we think that wage growth is unlikely to fall far enough in these countries to bring... 2nd March 2023 · 19 mins read
Europe Economics Update ECB account consistent with high-for-longer The account of the ECB’s last meeting is consistent with our view that the ECB will raise its deposit rate to 3.0% a fortnight today and continue hiking beyond that. In light of the data released... 2nd March 2023 · 3 mins read
Asia Economics Update Policy to remain tight as Pakistan eyes IMF deal Pakistan’s central bank (SBP) raised its policy rate by 300bps (to 20.0%) today, and signalled monetary policy would remain tight as policymakers look to secure a loan deal with the IMF and tackle... 2nd March 2023 · 3 mins read
Europe Data Response Euro-zone Flash HICP (Feb.) February’s increase in core inflation will reinforce ECB policymakers’ conviction that significant rate increases are needed. For some time we have been forecasting a 50bp hike at the meeting in two... 2nd March 2023 · 3 mins read
Bank of Canada Watch Too soon for pause to become permanent The fall in CPI inflation in January and stagnation in fourth-quarter GDP mean there is little chance of the Bank of Canada resuming interest rate hikes next week. But concerns about the tight labour... 1st March 2023 · 7 mins read
RBA Watch RBA will lift cash rate to 4.1% The RBA adopted a more hawkish tone at its February meeting and we expect it to hike the cash rate to 4.1% by May. But with recent economic data mostly surprising to the downside, we still see a good... 1st March 2023 · 8 mins read
Australia & New Zealand Data Response Australia GDP (Q4 22) & CPI Indicator (Jan. 23) GDP growth softened last quarter and inflation slowed sharply in January. But with inflation still very high, that won’t prevent the RBA from hiking the cash rate to a peak of 4.1% in May. 1st March 2023 · 3 mins read
EM Markets Chart Pack Rocky road may still be ahead for EM assets We think even if some of the recent headwinds that have buffeted emerging market (EM) assets fade, a slowdown in global growth might keep them under pressure in the near term. 28th February 2023 · 9 mins read
Capital Daily Rise in euro-zone bond yields may be overdone We think the recent rise in euro-zone government bond yields will reverse course over the rest of 2023, and that “periphery” spreads may widen a bit as investors’ risk appetite deteriorates. 28th February 2023 · 6 mins read
Emerging Europe Economics Update MNB getting close to phasing out its stabilisation tools Hungary’s central bank (MNB) reiterated the message that it’s unlikely to cut its base rate anytime soon, when it left that rate on hold again today (at 13.00%). That said, the MNB offered some signs... 28th February 2023 · 3 mins read
Emerging Europe Rapid Response Hungary Interest Rate Announcement (Feb.) 28th February 2023 · 2 mins read
China Chart Pack A near-term fiscal boost Local governments have stepped up their borrowing since the start of the year. They issued RMB860bn in special bonds over the course of January and February, up from an average of RMB105bn per month... 28th February 2023 · 12 mins read
