Bank of Japan Watch BoJ to extend Covid aid, won’t lose control of yields While renewed virus restrictions are unlikely to be deflationary, we think Omicron fears will prompt the Bank of Japan to err on the side of caution and extend its emergency corporate funding measures... 9th December 2021 · 8 mins read
Capital Daily We expect the rebound in the Brazilian real to be short-lived While the real has strengthened against the US dollar following a further 150bp hike from Brazil’s central bank yesterday, we doubt that there will be a sustained rebound. 9th December 2021 · 6 mins read
UK Economics Omicron to stay MPC’s hand, but won’t prevent 2022 lift off We wouldn’t completely rule it out, but we no longer expect the Monetary Policy Committee (MPC) to raise interest rates from 0.10% on Thursday 16 th December. We now think rates will rise to 0.25% in... 9th December 2021 · 9 mins read
Nordic & Swiss Central Bank Watch Norges Bank to hike as planned, despite Omicron Omicron means that a Norges Bank rate hike next Thursday is no longer as nailed on a prospect as it once was, but we still think that policymakers will decide to raise rates to +0.50%. Meanwhile... 9th December 2021 · 6 mins read
Middle East & North Africa Economics Weekly Iran-JCPOA, Qatar’s budget, UAE working week shift The seventh round of talks to revive the Iran nuclear deal resumed today, having halted last week, and it appears as though reaching an agreement is some way off. This could put upwards pressure on... 9th December 2021 · 7 mins read
Latin America Economics Update Brazil: chunky rate hikes to go on despite recession Brazil’s central bank gave a clear steer that, even though the economy entered recession in Q3 and shows little sign of growth in Q4, it will follow the 150bp hike in the Selic rate yesterday (to 9.25... 9th December 2021 · 3 mins read
Emerging Europe Economics Update NBP slows tightening, but steps up hawkish rhetoric The National Bank of Poland’s decision to slow the pace of its tightening cycle with a 50bp interest rate hike (to 1.75%) seems a bit inconsistent with its more hawkish tone on inflation in the... 8th December 2021 · 3 mins read
Canada Economics Update Bank keeps policy rate guidance unchanged The Bank of Canada’s unchanged policy rate guidance implies it could wait until the third quarter before raising rates but, given wage growth is now picking up sharply, we expect it to pull the... 8th December 2021 · 3 mins read
US Fed Watch Fed pivot will take rates to more than 1.5% in 2023 In sharp contrast to the surprisingly dovish November meeting, we expect Fed officials will use their December meeting to lay the ground for markedly tighter policy in the years ahead. The... 8th December 2021 · 8 mins read
India Economics Update RBI still taking baby steps towards tightening The MPC voted to keep policy rates on hold today, opting only to introduce further small measures to withdraw liquidity from the banking sector. With the RBI still focusing primarily on supporting the... 8th December 2021 · 3 mins read
Emerging Europe Economics Update Turkey: five key questions (and answers) This Update answers some of the most common questions that we have received from clients during Turkey’s recent turmoil. In short, the economic fallout doesn’t look like it will be as bad as it was... 7th December 2021 · 4 mins read
UK Economics Omicron may weaken activity but lift price pressures While the emergence of the Omicron COVID-19 variant has increased the downside risks to our GDP forecasts, it has arguably increased the upside risks to our CPI inflation forecasts. The... 7th December 2021 · 9 mins read
Australia & New Zealand Economics Update RBA to hike rates by less than markets anticipate The RBA still sounded dovish when it kept policy unchanged policy. We think that rates will rise earlier than the Bank anticipates but later and by less than what the financial markets price in. 7th December 2021 · 3 mins read
Capital Daily Fed policy, the Treasury yield curve, and term premia The recent flattening of the US Treasury yield curve mainly reflects a renewed plunge in long-dated term premia, at least based on one set of estimates published by the Fed. Its “risk-neutral”... 6th December 2021 · 5 mins read
Europe Chart Pack Omicron adds to downside risks High frequency data show that travel to retail and recreation destinations, restaurant bookings and flights have all declined in the past few weeks as coronavirus restrictions have been tightened in... 6th December 2021 · 11 mins read
Asia Economics Update Bank of Korea facing a policy dilemma We expect the Bank of Korea to continue raising interest rates next year, but the worsening near-term prospects for growth mean the outlook for monetary policy has become less clear cut. 6th December 2021 · 2 mins read
