Capital Daily YCC, rate expectations, and JGBs We think there is a good chance the 10-year JGB yield would rise a lot further than it has already if the BoJ chose to abandon Yield Curve Control (YCC) tomorrow. Nonetheless, we doubt any big... 17th January 2023 · 6 mins read
Canada Data Response Business Outlook & Consumer Expect. Surveys (Q4) The Bank of Canada’s latest quarterly surveys leave no doubt that higher interest rates are weighing on demand, but still don’t show a convincing moderation in wage and inflation expectations... 16th January 2023 · 3 mins read
Europe Economics Update Spanish inflation will soon be below 2% The fall in Spanish gas and electricity prices that has already happened is likely to cause energy inflation to slump to minus 20% in the coming months and this in turn will pull headline inflation... 16th January 2023 · 2 mins read
UK Economics Update Drag from higher interest rates will soon intensify The recent resilience of the economy to the dual drags of high inflation and higher interest rates doesn’t mean the pain has been avoided. Instead, our analysis suggests that higher interest rates... 16th January 2023 · 4 mins read
Canada Economics Weekly A pivotal week for policy outlook The December CPI data and the Bank of Canada’s quarterly business and consumer surveys, released next week, could have a big bearing on the policy outlook. For the Bank to pause after one final 25 bp... 13th January 2023 · 7 mins read
Latin America Economics Weekly Brazil’s riots, Peru turmoil, Mexico’s USMCA win Brazil’s financial markets have recovered after an initial drop following the riots in Brasília last Sunday, but we think there are reasons for caution. This is all coming at a time when the economy... 13th January 2023 · 5 mins read
Africa Economics Weekly South Africa’s ruling party policies stuck in old ways At a key policy conference, South Africa’s ruling party officials offered little by way of new ideas to address the country’s mounting economic challenges. And some fresh proposals risk making matters... 13th January 2023 · 7 mins read
Nordic & Swiss Economics Weekly Norges Bank, Riksbank and ECB to converge on 3% With economic activity and inflation both ending last year a bit stronger than anticipated, central banks are on track to deliver more policy tightening in the coming weeks, beginning with a 25bp hike... 13th January 2023 · 6 mins read
Asia Economics Update Korea: tightening cycle over, rate cuts later this year The Bank of Korea today raised interest rates by a further 25bps (to 3.50%) and relatively dovish comments by Governor Rhee support our view that the tightening cycle is now over. With growth set to... 13th January 2023 · 3 mins read
Japan Economics Weekly Price pressures broadening, 10-year yields at 0.5% There are early signs that the surge in “core” goods inflation is running out of steam, but services inflation is strengthening. Services inflation won’t accelerate fast enough to offset the coming... 13th January 2023 · 8 mins read
Australia & New Zealand Economics Weekly RBA has more work to do With inflation remaining stubbornly high and consumption resilient, the Reserve Bank of Australia will continue to hike interest rates for a while yet. However, there are some early signs that the... 13th January 2023 · 5 mins read
Global Economics Update Upgrade to 2023 China forecast and its implications Disruption from China’s reopening is fading faster than we had expected and we have revised up our forecast for growth there from 2.0% to 5.5%. This means that global GDP growth will be stronger than... 12th January 2023 · 3 mins read
Capital Daily Treasury yields may only have a bit further to fall The latest evidence of disinflation in the US was met with a muted reaction in US government bond markets. This probably reflects that investors’ expectations for inflation, and interest rates, have... 12th January 2023 · 6 mins read
Nordic & Swiss Central Bank Watch One (more) and done The Norges Bank is one step from ending its tightening cycle. We expect it to raise its policy rate by 25bp next week, to a peak of 3%. After that it is likely to pause while it waits to assess the... 12th January 2023 · 5 mins read
US Data Response Consumer Prices (Dec.) Core CPI inflation was still an elevated 5.7% in December but, with another more muted 0.3% m/m gain, the three-month annualised rate fell to a 20-month low of 3.1%. Admittedly, the latter is still... 12th January 2023 · 2 mins read
