Tue, Jan 22, 2019 @ 10:58 GMT
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...
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...
BOE is almost certain to keep the Bank rate unchanged at 0.5% in the May meeting. Weakness in PMI data released last week aggravated concerns that recent the moderation in economic activities might persist. Doubts have arisen that whether...
A rate hike of +25 bps at the upcoming FOMC meeting is a done deal as the market has for months priced in over 90% chance of its occurrence. Recent macroeconomic developments indicate such rate hike is totally justified....
BOJ offered to buy 190B yen of JGBs with maturity of 10- 25 years, down 10B yen from the purchase made on December 28. It also reduced the purchase of JGBs with maturity of 25- 40 by the same amount to 90B yen. The move has heightened speculations that the central bank is preparing to trim its stimulus measures. The market reactions match with the speculations with USDJPY slipping -0.42% while EURJPY down -0.65% on Tuesday. Japanese longer- dated 20- and 40-year bond yields rose to their highest in a month. Longer- term US Treasuries were also affected by BOJ’s move with 10-year yields gaining +6 points to 2.546%. Of course, the movement of US Treasuries was also affected by the auctions this year.
Surprisingly, BOE voted 6-3 to leave the Bank rate on hold at 0.50%. Chief economist Andy Haldane joined Ian McCafferty and Michael Saunders in opting for a +25bps rate hike. The outcome is more hawkish than consensus of a...
While it has been widely anticipated that this week’s ECB meeting would be non-eventful, it is closely watched. We expect the central bank to reaffirm that the monthly asset purchases would be halved in size (from 30B euro to...
As widely anticipated FOMC left the Fed funds rate target at 1.5-1.75% in May. The accompanying statement also came in largely in line with our expectations – shrugging off moderation in first quarter growth and getting more confident in...
ECB's decisions in June came in largely in line with our expectations, although it might have contained surprises for other market participants. The central bank decides to reduce the size of its QE program to 15B euro/ month, from...
The recovery in euro since late-May gathered momentum last week after ECB Chief Economist and executive board member Peter Praet signaled the central bank would discuss QE tapering at this week’s meeting. We are not surprised by this as...
The minutes for the July FOMC meeting affirmed that the policy rate is prone to increase in September, notwithstanding Trump’s pressure. The members remained upbeat over the economic growth outlook but warned on downside risk due to intensifying trade...
The upcoming FOMC meeting later this week aims at preparing the market for another +25 bps rate hike in September. As no press conference and economic projections would follow the August meeting, the post-meeting statement, and the minutes in...
Weaker USD, lower Treasury yields, higher equities… Market reactions showed that Fed’s chair Jerome Powell’s speech at Jackson Hole symposium was interpreted as “dovish". Discussing about “Monetary Policy in a Changing Economy”, Powell revealed the challenges of navigating the stars...
Decided unanimously, FOMC raised the Fed funds rate by +25 bps to a range of 1.75-2.00%. In a technical adjustment, it also lifted the interest rate paid on required and excess reserve balances, by +20 bps, to 1.95% so...
There have been both positive and negative data released since the March FOMC meeting. We expect policymakers to view slowdown in GDP growth as driven by temporary factors which should not affect the monetary policy outlook. Meanwhile, the central...
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...
The FOMC minutes for the June meeting revealed that the members were confident over the growth and inflation outlook, although they acknowledged intensifying trade conflicts. There were discussions over the term structure of interest rates. While many of them...
BOE’s rate hike in August is almost fully priced in. The focus is, thus, on the monetary policy outlook. The upcoming increase of +25 bps is the second one in more than a decade. Although the pickup in growth...
FOMC's rate hike of +25 bps is not news. What caught market attention the most was the median dot plot (which continued to project 3 rate hikes in 2018) and the upgrades in the economic projections. US dollar plunged...
BOJ made some changes in its unconventional monetary policy in July. We believe these changes sent a dovish message that it takes longer time than previous anticipated for inflation to reach the +2% target. At this meeting, BOJ introduced...
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