Central banks news

FOMC Minutes Reveal Dovish Notes Which Were Hidden in December

To us, the message conveyed in the FOMC minutes for the December meeting was somehow different from those at the post-meeting press conference. From the post-meeting statement and Chair Jerome Powell’s speech, we judged that the Fed turned a bit ...

BOC Pushed Back Timing for Next Rate Hike, Trimmed GDP Growth and Inflation Forecasts for 2019

As we expected, BOC left the policy rate unchanged at 1.75% in yesterday. Policymakers admitted that the decline in oil price has “material” impact on the economy. Yet, they viewed the impact as transitory. Reflecting the view on economy projections, ...

BOC Preview – No Change in Rates, Dovish Stance Accompanied by Modest Forecast Downgrades

We expect BOC to leave the policy rate unchanged at 1.75% at the upcoming meeting this week. Besides releasing the statement and Monetary Policy Report, the central bank would also update the economic forecasts and host a press conference. The ...

BOE Turns Dovish as Brexit Deadline Nears, Yet No Deal is Secured

BOE voted 9-0 to leave the Bank rate unchanged at 0.75% in December. The committee also voted unanimously to leave the asset purchase program at 435B pound .It has turned more cautious than November, warning that Brexit uncertainty has “intensified ...

FOMC Review – Fed Not As Dovish As Expected

The December FOMC meeting outcome is expected, yet unexpected. As widely anticipated, it raised the policy rate, by +25 bps, to 2.25-2.5%. The IOER rate was raised by +20bps. The members trimmed the rate hike forecasts to two, form three, ...

BOJ: Loss in Communication Hinders Policy Effectiveness

The government of Japan downgrades its forecasts on GDP growth and inflation for the coming years. This evidences the failure of the transmission mechanism of the monetary policy adopted by the Bank of Japan. We believe the central bank has ...

BOE Probably Turns More Cautious amid Brexit Uncertainty

At the meeting later in the week, BOE would most likely leave the Bank rate unchanged at 0.75%. It would also keep the purchases of gilts and corporate bonds remain at 435B pound and 10B pound, respectively. BOE sounded hawkish ...

Fed Likely Hikes Rate in December, Future Path More Dovish

While the majority of market participants (including us) expects the Fed to raise the policy rate, by +25 bps, to 2.25-2.5% at the December meeting, this is far from fully priced in. CME’s Fed funds futures suggest that the market ...

ECB’s Reinvestment of QE Proceeds Would Well- Pass First Rate Hike. Growth Outlook Downgraded

ECB made a much of announcement at the December meeting. Yet, most of them had been widely anticipated by the market. What we want was confirmation. The members formally indicated that the asset purchase program (QE) would end by this ...

ECB Preview – Focus on Reinvestment Plan, New Round of TLTRO

The market is closely watching ECB’s policy after QE. At the upcoming meeting next week, ECB would announce its plan to reinvest the maturing bonds. Meanwhile, market speculations are rising that the central bank would soon announce a new round ...

BOC Preview: Will Poloz Maintain Hawkish Stance?

Bank of Canada is expected to keep its policy rate unchanged at 1.75%, after a rate hike of +25 bps in October. Despite bets of another move this month, we believe policymakers would take a wait- and- see mode to ...

RBA More Concerned about Housing Markets, Disinflation Likely Keeps Policy Rate Unchanged for 2019

As widely expected, RBA left the cash rate unchanged at 1.5% for the 26th consecutive meeting. The accompanying statement contained little new information. Yet, it revealed that the members were dovish about the housing market. Meanwhile, disinflation in Australian economy ...

FOMC Minutes Signals Rate Hike “Fairly Soon”, Policy Outlook Masked by Tariff and Debts

The FOMC minutes for the November revealed that the members still considered a rate hike in December is appropriate. Yet, they debated on the change in forward guidance regarding the pledge on “further gradual increases” in the policy rate. Some ...

Fed Chair Powell’s U-Turn on Interest Rates?

Stock markets rallied after Fed Chair Jerome Powell’s speech at the Economic Club, New York. Market players were thrilled amid their interpretation that Powell has turned dovish, probably succumbed to Trump’s endless criticism. We do not see an abrupt turn ...

ECB Might Keep Policy Rates Low for Longer, Given Downside Risk to Growth and Trade War

ECB has tilted its tone on the economic outlook recently. In the minutes for the October meeting, ECB acknowledged “uncertainties and fragilities” in the economy. The members noted that risks to the economic outlook is skewed to the downside as ...

Australia: Low Unemployment Rate Masks Underlying Problems in Job Market

RBA has sounded confident in the domestic growth outlook in both. On the job market, the members acknowledged the decline in unemployment rate and indicated the “notable” fall in youth unemployment. The central bank forecast that employment growth would be ...

Limited News from FOMC, December Rate Hike Hopes Unaltered

As widely anticipated, FOMC left the target range for the federal funds rate unchanged at 2.00-2.25% at its November meeting. The changes in the accompanying statement were limited. This is not unusual as the November meeting is in between important ...

RBNZ Affirmed the Next Move Can be Up Or Down, Despite Upbeat Data

RBNZ left the OCR unchanged at 1.75% in November. The move had been widely anticipated. Despite recent strong dataflow, the central bank downplayed the improvements and Governor Adrian Orr affirmed that the next rate change can be up or down ...

RBA Turns More Upbeat Over GDP Growth, Keeps Rates Unchanged amidst Low Inflation

The RBA meeting this month is a non-event. As widely anticipated, the members left the cash rate unchanged at 1.5%, for the 25th consecutive meeting. The members remained upbeat over the economic outlook, expecting the job market to strengthen further ...

FOMC Preview – Affirming a Strong Economic Case for December Rate Hike

The aim of the FOMC meeting later this week is to prepare the market for a December rate hike. While the recent stock market crash and slowdown in inflation have trimmed bet for a December rate hike to 77.5% from ...