Central banks news

FOMC Preview – Focus on Dot Plot for Potential Third Rate Cut

Another rate cut, by -25 bps, is a done deal this week, although the market has trimmed its expectations to 66% from 92% a week ago. This would take Fed funds rate’s target range to 1.75-2%. The focus of the ...
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ECB Cuts Deposit Rate to Historical Low of -0.5%, Resumes QE

ECB has announced a new package of stimulus measure as inflation weakens. At the same time, the central bank revised lower both GDP growth and inflation outlooks for coming years. EURUSD initially plunged to as low as 1.0927 before a ...
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ECB Preview – Awaiting New Easing Package

We expect ECB to deliver a easing package at this week’s meeting. Economic developments since the last meeting have remained steady. However, growth is limited and risk is skewed to the downside. The latest economic projections will show downgrades in ...
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BOC Sounds Less Dovish than Expected, as Housing Market and Wage Growth Improve

BOC left the policy rate unchanged at1.75%. Policymakers’ monetary policy stance was less dovish than previously anticipated. While showing more concerns about US-China trade war and downplaying GDP growth in the second quarter, the members described the current monetary policy ...
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RBA Left Rate Unchanged, More Flexible on Future Policy Decision

As expected, RBA left the cash rate unchanged at 1% in September. The accompany gin statement is largely unchanged from the previous one. RBA has not made any hints about a rate cut next month. Policymakers might want to take ...
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RBA Preview – Staying Put before Further Easing

Although the market generally expects RBA to leave the cash rate unchanged at 1% this week, the chance of a surprise cut is not negligible. Despite mild pickup in confidence after the back-to back rate cuts in June and July, ...
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BOC Prepares for Insurance Rate Cut

Global economic slowdown, escalations of US- China trade war and further Fed funds rate cut have heightened speculations that BOC would have to lower its policy rate in coming months. We agree on this assessment but expect that the insurance ...
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FOMC Minutes Explained the Rationale for Precautionary Rate Cut. Further Reduction Likely in Coming Months

The FOMC minutes for the July meeting explained that the key reasons for the rate cut are slowdown in global economic outlook and subdued US inflation. An insurance reduction was needed to prevent these factors from dragging US economy. Yet, ...
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RBA Minutes Indicates Data- Dependence in Future Policy. Further Rate Cuts Likely Given Limited Decline in Unemployment Rate

RBA’s minutes for the August meeting indicated that future monetary policy action would be data-dependent. While acknowledging some improvements in the economic developments after the two consecutive rate cuts, spare capacity in the labor market remained significant. The country’s unemployment ...
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RBNZ Cut Policy Rate by -50 bps, Hinting Negative Interest Rate

RBNZ surprised the market by reducing the OCR, by -50 bps, to 1%. The market had only anticipated a -25 bps cut. The aggressive rate cut is “necessary” to help support employment and inflation in the country as downside risks ...
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RBNZ Preview – Another Rate Cut is Needed to Boost Inflation and Support Employment

We expect RBNZ to cut the OCR, by -25 bps, to 1.25% in August. Given the disappointment in the inter-meeting data flow, the central bank would likely signal further easing later in the year. Meanwhile, the policy statement might focus ...
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RBA Preview – Pausing (Not Ending) after Two Consecutive Rate Cuts

Following two consecutive rate cuts, RBA is widely expected to leave the cash rate unchanged at 1% in August. Incoming economic data since the last meeting have also supported the pause. Yet, given the aggressive target in the longer-term unemployment ...
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