Asia Economics Update Bank of Korea turning even more hawkish The Bank of Korea (BoK) is far from done, after making its first back-to-back rate hike since 2007 today. We now expect a total of four 25bp hikes in 2022, taking the policy rate to 2.00%. 14th January 2022 · 3 mins read
Capital Daily Dollar drop is at odds with increasingly hawkish Fed The US dollar has started the year on the backfoot and there are several factors that may weigh on it further in the near term. But we think that the Fed’s increasingly rapid shift towards a tighter... 13th January 2022 · 6 mins read
Nordic & Swiss Central Bank Watch Norges Bank to take pause, as Olsen bows out Norwegian policymakers will keep interest rates on hold, at +0.50%, next Thursday, before resuming their tightening cycle in March. We forecast one rate hike per quarter this year, which is one more... 13th January 2022 · 5 mins read
Middle East & North Africa Economics Weekly Oil and Gulf fiscal policy, Egypt joins GBI-EM, Tunisia We think that the recent rally in oil prices is likely to be short lived and, as prices fall back, the window for governments in the Gulf to loosen fiscal policy will shut. Elsewhere, Egypt’s... 13th January 2022 · 5 mins read
FX Markets Update The outlook for high-beta DM currencies in 2022 We think that rate differentials and commodity prices will be the key factors driving the relative performance of six “high-beta” DM currencies in 2022, continuing last year’s trend. We expect all... 13th January 2022 · 4 mins read
Nordic & Swiss Economics Update Riksbank to join tightening crowd later this year We expect policymakers in Denmark and Switzerland to match the 50bps of interest rate hikes that we now forecast in the euro-zone next year. And against the backdrop of rising global interest rates... 13th January 2022 · 3 mins read
Canada Economics Update Will the Bank of Canada hike this month? We expect the Bank of Canada to wait for the coronavirus restrictions to be lifted before starting to raise interest rates, suggesting it is more likely to begin hiking in March or April than at its... 12th January 2022 · 3 mins read
Bank of Japan Watch Shrinking balance sheet won’t lead to tighter policy While Omicron is likely to intensify input price pressures, most Japanese firms will continue to absorb those costs in their margins, ensuring inflation stays well below the Bank’s 2% target. And in... 12th January 2022 · 8 mins read
Middle East & North Africa Economics Update What to expect in MENA in 2022 We think that GDP growth in the Gulf will be stronger than most expect this year on the back of rising oil output. Elsewhere, we expect a larger depreciation of the Egyptian pound than most anticipate... 12th January 2022 · 4 mins read
Europe Economics Update ECB likely to raise rates to zero in 2023 With pandemic-related inflationary pressures proving a bit more intense and persistent than we had anticipated, and policymakers sounding more willing to tighten policy, we think the ECB is most... 12th January 2022 · 3 mins read
Australia & New Zealand Economics Focus Housing downturn will lead to RBNZ rate cuts in 2023 While the strength in New Zealand’s economy will cause the RBNZ to hike rates further this year, we think the RBNZ will end its hiking cycle earlier than the financial markets anticipate. What’s more... 12th January 2022 · 19 mins read
Japan Economic Outlook BoJ still facing no inflation pressure The Omicron surge will cause a renewed fall in consumer spending this quarter. But we still expect GDP to return to its pre-virus path in the second half of the year. And while Omicron and any... 12th January 2022 · 22 mins read
US Economics Update Hawkish Powell consistent with March rate hike In his Senate re-nomination hearing today, Fed Chair Jerome Powell echoed the increasingly hawkish rhetoric coming from other officials. We expect the fed funds policy range to reach 1.00% to 1.25% by... 11th January 2022 · 3 mins read
Europe Economics Update Rate hikes might not spell the end of ECB QE We doubt that “fiscal dominance” – worries about the impact of higher interest rates on debt sustainability – would stop the ECB from raising interest rates. But it might encourage the Bank to... 11th January 2022 · 3 mins read
Europe Chart Pack Inflation to remain above target in 2022 Euro-zone inflation reached 5.0% in December, which is likely to be the peak. Unless oil and gas prices surge again in 2022, which seems unlikely, energy inflation will plummet – we forecast the... 11th January 2022 · 12 mins read
Australia & New Zealand Economics Update Our key calls for 2022 We think that GDP growth in Australia will surprise to the upside. But with wage growth only approaching the 3% watermark the RBA would like to see by year-end, we expect the Bank to keep rates on... 11th January 2022 · 3 mins read
