India Economics Weekly Food inflation, new MSPs, RBI policy The Reserve Bank stepped up the pace of tightening by hiking the repo rate by 50bps to 4.90% this week. It also upped its inflation forecasts substantially, primarily due to food inflation. We agree... 10th June 2022 · 5 mins read
Australia & New Zealand Economics Weekly RBA could raise rates even faster than we anticipate We’ve long been arguing that the RBA will lift rates more sharply than most analysts anticipate and the RBA’s surprise 50bp rate hike this week is consistent with our view that rates will reach 3% by... 10th June 2022 · 5 mins read
Bank of Japan Watch Weak wage growth to preclude tighter policy While Japanese inflation will stay just above the Bank of Japan’s 2% target over the coming months, the Bank will not tighten policy at either the short or long end of the yield curve while wage... 10th June 2022 · 8 mins read
Capital Daily Hawkish ECB much more concerning for BTPs than Bunds While the yields of 10-year government bonds have risen across the euro-zone after the ECB sounded particularly hawkish at its meeting today, we suspect that further upward pressure on “core” yields... 9th June 2022 · 7 mins read
Europe Economics Update ECB to raise rates, and without a new backstop Today’s policy statement and press conference sets the stage for the ECB to raise interest rates by 75bp by September and we expect that to be followed by two more hikes this year. The Bank’s failure... 9th June 2022 · 3 mins read
FX Markets Update Fed’s “QT” supports our case for a stronger US dollar While we doubt it will be the main driver of the US dollar, the ongoing reduction in the size of the Fed’s balance sheet (i.e., “quantitative tightening”, or “QT”) adds to our conviction that the... 9th June 2022 · 3 mins read
UK Economics Joining the 50bps club The further tightening in the labour market, the additional loosening in fiscal policy and more evidence that the weaker activity outlook is not reducing price and wage expectations lead us to believe... 9th June 2022 · 10 mins read
Asia Economics Focus Bank of Korea to cut rates next year as headwinds mount The Bank of Korea (BoK) is almost certain to hike interest rates further this year, but with financial risks receding, economic growth likely to slow and inflation set to fall back to target by early... 9th June 2022 · 8 mins read
Australia & New Zealand Chart Pack Steeper interest rate hikes and larger house price falls Hawkish shifts by the RBA and the RBNZ in recent weeks have prompted us to forecast an even more aggressive hiking cycle by both central banks in the months ahead. Both central banks hiked rates by... 9th June 2022 · 11 mins read
US Fed Watch 50bp hikes to continue until inflation slows The Fed is set to hike interest rates by 50bp at its meeting next week and to signal that a similar move is coming in July. We still think a drop back in inflation will allow officials to ease the... 8th June 2022 · 8 mins read
UK Economics Activity holding up and price pressures strengthening Real economic growth is slowing rather than collapsing in the face of the twin drags of higher inflation and rising interest rates. The Chancellor’s latest fiscal handout will help support GDP in the... 8th June 2022 · 9 mins read
Latin America Economics Update Chile: tightening cycle will go further than most expect The guidance in the Monetary Policy Report released by Chile’s central bank today, following on from its 75bp rate hike to 9.00% yesterday, suggests that the tightening cycle has a little further to... 8th June 2022 · 3 mins read
Emerging Europe Economics Update Turkey, the lira and previous currency crises The Turkish lira has continued to slide and the current backdrop is eerily similar to that which preceded previous currency crises. Sharp and disorderly falls in the lira over the coming weeks are now... 8th June 2022 · 3 mins read
Asia Economics Update Thailand: rates set to rise, but tightening to be gradual The Bank of Thailand left interest rates unchanged today, but hawkish comments from the central bank suggest that rates will be raised sooner than we had previously expected. 8th June 2022 · 3 mins read
India Economics Update RBI tightening cycle has further to run The RBI hiked the repo rate by 50bps to 4.90% today, as we had anticipated, and made substantial upward revisions to its near-term inflation forecasts. Further tightening will follow over the coming... 8th June 2022 · 3 mins read
Australia & New Zealand Economics Update Housing downturn will prompt RBA rate cuts in 2023 With the RBA set to hike the cash rate to 3% by early-2023, we now expect house prices to fall by 15% from their April peak. While the economy has considerable momentum from reopening in the near-term... 8th June 2022 · 3 mins read
