Central Bank Views

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 the inflation outlook. The more hawkish FOMC statement maintained market...

Extending the streak for a 19th month, RBA left the cash rate unchanged at 1.5% in May. Benign inflation and recent slowdown in employment growth are allowing policymakers to keep the monetary policy accommodative. The accompanying statement was largely unchanged from the previous one, with the key positive coming...

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 bank would likely acknowledge recent pickup in core inflation and...

In line with our expectations, ECB largely judged the recent slowdown in economic data as driven by temporary factors and moderation after periods of strong growth. The members maintained the view that risks to growth were “broadly balanced” and remained confident that inflation would converge towards the +2% target....

Despite expectations that the ECB would only announce adjustments on QE and interest rate in June the earliest, the upcoming meeting is not a non-event. Since the March meeting, Eurozone’s economic data have surprised to the downside. It would be of great interest to see the policymakers’ interpretation of...

BoC has sent a mixed message in yesterday's statement. Although the next rate adjustment remains a hike, the timing remains data-dependent and hinged on a number of uncertainties, including NAFTA negotiations and geopolitical tensions, something critical to Canada due to its position as oil exporter. Policymakers upgraded the assessment...

The FOMC minutes for the March meeting reinforced the members’ confidence over the economic growth outlook and that inflation would return to the +2% target in the medium-term. The confidence was mainly driven by the tax reform plan passed late last year as well as passage of the Federal...

The April RBA meeting contained little surprise. Policymakers left the cash rate unchanged at 1.5% and made few changes in the policy statement. The central bank remained upbeat on growth and employment. Yet, it remained wary of the slow growth in wage. Meanwhile, the members took note of the...

BOE voted 7-2 to leave the Bank rate at 0.50%. The members voted unanimously to leave to asset purchase program unchanged at 435B pound. The members were generally positive over the economic outlook, noting that "recent data releases are broadly consistent with the MPC's view of the medium-term outlook...

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 from almost a three-week highe after the announcement. The message...

Despite initial rally following the announcement of a Brexit transition deal, British pound has retraced much of its gains. Both UK and EU officials have hailed the agreement. While UK's Brexit negotiator Davis David noted that the deal contains 'a large part of what will make up an international...

Aussie remains under pressure although the RBA minutes contained little surprise. The minutes signaled that policymakers were encouraged by recent economic growth. However, subdued wage growth and elevated household debt have suggested that policymakers would keep the powder dry. Meanwhile, the slowdown in the housing market has diminished the...

As widely anticipated, the SNB kept the sight deposit rate unchanged at -0.75%, while the target range for the three-month Libor stayed at between –1.25% and –0.25%. Again, the SNB maintained the commitment to intervene the FX market when needed, reiterating that it would 'remain active in the foreign...

Surprising to most market participants, ECB dropped the easing bias in the forward guidance. While this had initially sent the euro slightly higher, it reversed as President Mario Draghi reinforced that the act was 'backward looking' and would not affect future monetary decision making. Policymakers remained confident over the...

As widely anticipated, BOC left the policy rate unchanged at 1.25% in March. The accompanying statement was more cautious than the previous one, over the trade outlook. Policymakers suggested that 'trade policy developments are an important and growing source of uncertainty for the global and Canadian outlooks', in addition...

As widely anticipated, RBA left the policy rate unchanged at 1.5% in March. A cooling property market signals that further rate hike is less urgent. On top of the central bank’s agenda has returned to boosting inflation and employment. In 2017, Australia’s CPI averaged at 1.9% while the unemployment...

While mainly maintaining the FOMC's stance, the new Fed Chair Jerome Powell's Congressional testimony before the House Finance Services Committee was interpreted as a hawkish one. Heightened speculations for three, or more, rate hikes this year were reflected in higher yields, the rise of the US dollar to...

The BOE left the Bank Rate unchanged at 0.5% and the asset purchase program unchanged at 435B pound. The members voted unanimously (9-0) for the decision. What caught the market attention most is the comment that the“monetary policy would need to be tightened somewhat earlier and by a...

As widely anticipated, RBNZ left the OCR unchanged at 1.75%. Owing to the downside surprise in 4Q17 inflation, policymakers revised lower their inflation forecast, mainly driven by tradeable inflation. Meanwhile, the central bank now sees currency appreciation a less concern, as NDZUSD has retreated to a one-month low, and indicates that the positive impacts of fiscal stimulus (including KiwiBuild and the increase in minimum wages) have diminished. The overall monetary stance remains neutral with the first hike unlikely coming before the 2Q19.

In its first meeting in 2018, RBA maintained the cash rate unchanged at 1.5%. The decision had been widely anticipated. As suggested in the accompanying statement, the central bank continued to see positive economic developments both globally and at home. Policymakers have turned slightly more upbeat over the domestic growth outlook, projecting GDP to expand 'a bit above 3% over the next couple of years'. Meanwhile, RBA revealed that the central forecast for CPI is 'a bit above 2% in 2018. This marks a more hawkish tone when compared with December’s language. While the job market has improved a lot, with the unemployment rate falling to the lowest level in 4.5 years, wage growth has remained lackluster. This has raised concerns over household expenditure.