FOMC Review – Divided Fed Signals Rate Cut This Year Still Likely
FOMC left the policy rate unchanged at 2.25-2.50% but with one dissent. St Louis Fed President James Bullard voted against the decision as he proposed to cut the rate by -25 bps. The dot plot projections show that more members...
RBA Minutes Indicate More Rate Cuts In Coming Months
RBA, in its June meeting minutes, explicitly noted that the policy rate would be lower. This message came in more dovish than market expectations. The major concern remained in the lackluster improvement in the labor market. RBA cut the bank...
BOE Preview – Record Low Interest Rate Remains Intact Despite Recent Hawkish Comments
We expect BOE to leave the policy rate unchanged at 0.75% this week. It would also keep the size of the asset purchase program at 435B pound. Although there has been some noise pushing for a rate hike, we expect...
FOMC Preview – Preparing for Rate Cut
The Fed could make a number of changes in the upcoming June FOMC meeting, to pave way for a rate cut in as soon as July. We would focus on three things: updated economic projections, adjustment in the forward guidance...
SNB Maintained Pledge to Intervene FX Market if SNF Too Strong. Question is How to React if Fed and ECB Ease Further
In its quarterly meeting, SNB announced to leave the policy rate – the interest rate on sight deposits, unchanged at -0.75%. On a technical change, the central bank introduced a new benchmark – the SNB policy rate- in replacement of...
ECB Not Dovish Enough – Low Rate to Stay until Mid-2020 and TLTRO Pricing Revealed.
We believe ECB’s more dovish tone in June is insufficient to stimulate the economy. As expected, ECB extended the timing that the historically- low interest would remain. It also released the pricing of the TLTRO-III. We were slightly disappointed that...
RBA Lowers Policy Rate to 1.25%. Two of Big Four Pledge to Pass the Cut to Market in Full
For the first time in 3 years, RBA lowered the cash rate by -25 bps to 1.25%, a fresh record low, in June. The rate cut had been well anticipated as the members sought to support the labor market and...
ECB to Add More Dovish Notes: Focus on Forward Guidance Extension and Pricing of TLTRO-III
We expect the ECB to deliver a more dovish message in June. We expect to see changes in the forward guidance. ECB would also announce the technical details of TLTRO-III. The economic projections would probably similar to the previous ones,...
Market Not Convinced by BOC’s Intentionally Neutral Tone
Despite BOC’s effort to temper the need of a rate cut, the market is obviously unconvinced. Market participants continue to price in about 30% chance of rate cut later this year and USDCAD surged to the highest level since January....
BOC to Avoid Hinting Rate Hike Despite Improvement in Economic Data
We expect BOC to stay put – leaving the policy rate unchanged at 1.75%, at the upcoming meeting. Macroeconomic indicators released since the April meeting showed improvement. Governor Stephen Poloz said in an interview last week that interest rates are...