Category: Central banks news

The ECB meeting came largely in line with expectations. While leaving the policy rates unchanged, the members confirmed that the PEPP program would end in March 2022. Meanwhile, they have extended the reinvestment process and topped up the APP program, as means to continuously provide liquidity to the market. The staff economic projections saw sharp …

ECB Reduces PEPP Purchases, Upgrades Inflation forecastsRead More

The BOE surprised the market in two consecutive months. After failing to deliver rate hike in November, the members surprisingly increased the Bank rate by +15 bps to 0.25% in December. Concerns over elevated trumped Omicron variant uncertainty. British pound rallied against US dollar and the euro. The members voted 8-1 to increase the Bank …

BOE Hikes Bank Rate, Surprising the Market Two Months in a RowRead More

Hawkish monetary policy FOMC delivered a hawkish outlook at the December meeting. Besides doubling the size of tapering as we had anticipated, more than two-third of the members have projected at least 3 rate hikes next year. The latest economic projections suggest that inflation could rise to +5.3% this year before easing. Both headline and …

Hawkish monetary policy. Fed Anticipates Rate Hikes Next YearRead More

The focus of this week’s ECB meeting is whether the PEPP would extend beyond March 2020 in light of the new Omicron variant and rapid increase the number of coronavirus cases across Europe since the November meeting. Recent comments from ECB officials signal that things would go as planned. The latest economic projections would also …

ECB Preview – Phase-Out of PEPP by March as ScheduledRead More

We expect the BOE to stand pat at this week’s meeting. October’s GDP came in weaker than expected, and the renewed restrictive measures to curb spread of the new Omicron variant could affect household consumption and put a brake on the job market improvement. We expect policymakers to wait for more certainty about the development …

BOE Preview – Delaying Rate Hike to February 2022Read More

The Fed this week will announce acceleration of QE tapering. With inflation approaching 7%, policymakers would likely revise its view on inflation outlook and “retire” the word “transitory”. The updated economic projections and median dot plots showing members’ interest rate projections would also be released. The Fed funds rate will stay a 0-0.25% until mid-2022. …

FOMC Preview – Fed to Double Size of QE TaperingRead More

Following a hawkish move in October, we expect the BOC to keep the powder dry this week. Policymakers should acknowledge the strong GDP growth and job market data, while cautioning over the uncertainty of the Omicron variant. They are also expected to reiterate the stance that the rate hike would come once the economic slack …

BOC Preview – Reiterating Rate Hike in First Half 2022 amidst Strong Economic DataRead More

The RBA left the cash rate unchanged at 0.1% and the asset purchase program at AUD 4B/week. Policymakers maintained a cautiously optimistic outlook over economic recovery despite Omicron uncertainty. Again, policymakers reiterated that the next meeting (February) would be the time to discuss the pace of QE purchases. The central bank remained cautiously optimistic over …

RBA Stayed Put, Cautiously Optimistic Over Domestic EconomyRead More

The RBA is widely expected to leave the cash rate unchanged at 0.1%. Given the mixed economic data flow since the last meeting, the uncertainty of the Omicron variant and the scheduled discussion about asset purchases in February, policymakers would stand pat at the upcoming meeting. They would also reinstate that a rate hike next …

RBA Preview – Keeping Powder Dry on Mixed Data and Omicron UncertaintyRead More

Despite concerns over the new coronavirus variant Omicron, Fed Chair Jay Powell’s testimony before the Senate was hawkish. He suggested that the Fed could accelerate the tapering of asset purchases in order to curb strong inflation. US dollar extended rally against major currencies, with the exception of Japanese yen and Swiss franc. The testimony is …

Hawkish Powell Expects Fed to End QE Tapering a Few Months Earlier than Previously AnticipatedRead More