HomeContributorsFundamental Analysis'Super Thursday' Of Rate Decisons

‘Super Thursday’ Of Rate Decisons


  • Plethora of rate decisions that highlight the divergence of central bank policies (Norges hikes by 25bps; SNB, Taiwan, Philippines, Indonesia hold); Turkey expected to cut despite continues record lows of the Lira currency.
  • Focus on upcoming BOE, ECB and BOJ decisions and the potential impact of the Omicron virus variant on decisions.
  • Major European Manufacturing PMI readings mixed (Beats: Germany, Euro Zone; Misses: France; In-line: UK).
  • German PMI Services suggest the domestic economic recovery came to a halt due to the resurgence of the pandemic.


  • New Zealand Q3 GDP Q/Q: -3.7% v -4.1%e; Y/Y: -0.3% v -1.4%e.
  • Australia Dec Preliminary Manufacturing PMI: 57.4 v 59.2 prior.
  • (19th month of expansion)
  • Australia Dec Consumer Inflation Expectation Survey: 4.8% v 4.6% prior.
  • Australia Nov Net Employment Change: +366.1K v +200.0Ke; Unemployment Rate: 4.6% v 5.0%e.
  • Japan Dec Preliminary PMI Manufacturing: 54.2 v 54.5 prior (11th month of expansion).
  • Japan Nov Trade Balance: -¥954.8B v -¥600.3B; Exports Y/Y: 20.5% v 21.0%e; Imports Y/Y: 43.8% v 40.0%.
  • RBA Gov Lowe reiterates stance that still a ways from a rate hike, Board prepared to be patient. Separates RBA’s decision on Bond Buying from rate hikes.
  • Australia Treasurer Frydenberg issued the Mid-Year Economic and Fiscal Outlook (MYEFO) which cut its GDP outlook while raising the CPI forecasts.
  • BOK Gov Lee bi-annual inflation review reiterated view that CPI to stay above 2% for quite some time amid a solid economic recovery and increasing price pressures from global supply bottlenecks. Rate hikes since August would help ease inflation eventually.


  • UK Chief Medical Officer Whitty: COVID case records will be broken a lot over next few weeks.
  • UK Business leaders said to be calling on the UK govt to come up with a plan and assistance amid the rapid spread of Omicron virus variant. Concerns that that a workers would have to self-isolate furthering disruptions to supply chains.
  • UK Tory party 1922 committee leaders said to join the Covid-19 passport rebellion. MP’s said to have been told they can email a letter of no confidence in the PM over Christmas.
  • Turkey President Erdogan replaced Deputy Treasury and Finance Ministers Sakir Ercan Gul and Mehmet Hamdi Yildirim; TRY currency hit a fresh record low vs. USD above the 15 handle.


  • FOMC left interest rates unchanged (as expected) and to reduce bond purchases by $30B/ month (doubles pace of tapering),. Fed opened the door to raising rates in spring. Dot plots show 3 rate hikes in 2022, 3 in 2023, and 2 more in 2024.
  • Fed Chair Powell post rate decision press conference noted that the economic developments and outlook warranted a faster bond taper; Elevated inflation was reason for accelerating taper. Quicker taper would allow Fed to adapt to the economic outlook. On track to end taper by mid-March. Bottlenecks and supply constraints had been larger and longer lasting than anticipated. Inflation to run above 2% goal well into next year; Did expect inflation to decline closer to 2% by end of 2022.

Speakers/Fixed income/FX/Commodities/Erratum


  • Indices [Stoxx600 +1.20% at 476.42, FTSE +0.92% at 7,236.53, DAX +1.58% at 15,719.95, CAC-40 +1.07% at 7,002.03, IBEX-35 +1.08% at 8,364.50, FTSE MIB +0.67% at 26,845.00, SMI +1.55% at 12,724.65, S&P 500 Futures +0.53%].
  • Market Focal Points/Key Themes: European indices open higher across the board and stayed amply positive as the session progressed; improved risk appetite seen following FOMC meeting within expectations; sectors among those leading to the upside are technology and materials; while laggard sectors include utilities and telecom; UK retail sector under pressure following outlook cut at Boohoo; Schroders confirms Greencoat Capital looking to take stake; Ascential sells MediaLink; focus on series of central bank decisions through rest of the day; earnings expected during the upcoming US session include Accenture, FedEx and Adobe.


  • Consumer discretionary: Domino’s Pizza UK & IRL [DOM.UK] +29% (resolution; trading update), boohoo.com [BOO.UK] -13% (trading update).
  • Energy: Electricite de France [EDF.FR] -12% (narrows outlook).
  • Healthcare: Novartis [NOVN.CH] +4% (buyback), Valneva [VLA.FR] +10% (vaccine data).
  • Industrials: Airbus [AIR.FR] +3% (large order), METRO [B4B.DE] -3% (earnings).


  • SNB Policy Statement reiterated its language on FX; that the CHF currency remained highly valued and was willing to intervene more strongly in the FX market. It noted that vulnerabilities of the mortgage and real estate markets increased.
  • SNB Quarterly SNB forecasts raised its 2021 GDP growth outlook from 3.0% to 3.5% and set the 2022 GDP growth at 3.0%. It raised the 2021 CPI from 0.5% to 0.6% and 2022 CPI from 0.7% to 1.0% but remained well below the 2% target.
  • SNB President Jordan post rate decision press conference noted that the real trade-weighted exchange rate for CHF currency (Franc) had hardly changed since the start of the pandemic. Believed that Swiss inflation had peaked and will decline in 2022.
  • Norway Central Bank (Norges) Policy Statement noted that the decision to hike by 25bps was unanimous and saw a gradual rise in policy rate in the coming years. It forward guidance saw another rate hike as likely being in March.
  • Norway Central Bank (Norges) Gov Olsen post rate decision press conference noted that the outlook had little changed since Sept.
  • German Chancellor Scholz stated that the EU Leader Summit to stress that Ukraine’s border must not be violated.
  • Germany Debt Agency on 2022 issuance: To sell approx €410B in debt in year (2nd highest on record).
  • Swiss KOF Institute Winter Economic Forecast raised its 2021 GDP growth from 3.2% to 3.9% while cutting the 2022 GDP growth from 3.6% to 3.0%. KOF Raised 2021 CPI from 0.5% to 0.6% and 2022 CPI from 0.6% to 0.8%.
  • German VCI (Chemical Industry Association): Maintains 2021 Production +4.5% y/y, prices +8.5% y/y, Rev +15.5% y/y.
  • Russia govt spokesperson Peskov stated that was prepared to begin Security talks and provided the US with two drafts for discussion. Inflation was high and remained a concern.
  • Philippines Central Bank (BSP) Policy Statement noted that it saws higher baseline CPI forecast for both 2021 and 2022 with risks being balanced for 2023. Maintained its support for the economy but mindful of inflation risks; prepared for any potential 2nd round effects on supply and CPI. Saw economic growth on former footing.
  • Indonesia Central bank (BI) Policy Statement noted that the decision to keep policy steady was consistent with need to keep IDR currency (Rupiah) stable amid global uncertainty and low inflation outlook. To optimize policy mix to maintain stability and support the economic recovery. The 2022 monetary policy would focus on pro-stability and other tools would be pro-growth.
  • Indonesia Central Bank (BI) Gov Warjiyo pre-rate decision press conference noted that Q4 GDP growth was seen improving with 2022 growth seen accelerating. CPI seen remaining low and supporting stability. Reiterated to keep IDR currency (Rupiah) to be in-line with fundamentals. Liquidity remains very loose.
  • Taiwan Central Bank (CBC) Policy Statement noted that the decision to keep policy steady was unanimous. To appropriately adjust policy when necessary and watch rate decisions from other major economies. Saw 2022 economic growth as mild.

Currencies/Fixed Income

  • USD was softer despite the Fed signaling three potential rate increases in 2022 and accelerated bond-purchase tapering as the outcome appeared to be already baked in. Overall risk-on appetite providing some unwinding of safe=haven flows.
  • EUR/USD back above the 1.13 handle ahead of the ECB rate decision despite an expected dovish ECB later today. ECB seen continuing pushing back against any hawkish tilt in market expectations on rates and emphasize that rates would not increase in 2022. Focus to be on its new macroeconomic (Staff) forecasts with markets believing ECB would continue to fall short of meeting its inflation objective in 2023 and 2024 period.
  • GBP/USD higher and approaching the 1.33 area ahead of the BOE. Decision whether to hike or hold the Bank Rate was on a knife edge among analysts. The question among the MPC is whether there is was value in waiting at this time. Uncertainty about the omicron virus variant on the public health and the economy. likely to keep policy on hold for now.
  • USD/JPY at 114.15 ahead of Friday’s BOJ policy meeting.
  • TRY currency (Lira) continued to weaken to fresh record lows as tested above 15.00 in trade after Turkey President Erdogan again replaced some govt officials in the Treasury Dept. Turkey Central Bank (CBRT) was again expected to cut One-Week Repo Rate by 100bps to 14.00% later todat despite the continued surge in Turkish inflation data (Nov CPI accelerated for a sixth straight month with YoY at 21.3%).

Economic data

  • (NL) Netherlands Nov Unemployment Rate: 2.7% v 2.9% prior.
  • (PH) Philippines Central Bank (BSP) left Overnight Borrowing Rate unchanged at 2.00% (as expected).
  • (ID) Indonesia Central Bank (BI) left the 7-Day Reverse Repo unchanged at 3.50% (as expected).
  • (FR) France Dec Business Confidence: 110 v 113e; Manufacturing Confidence: 111 v 109e; Production Outlook Indicator: 21 v 15e; Own-Company Production Outlook: 29 v 16e.
  • (CZ) Czech Nov PPI Industrial M/M: 1.2% v 0.9%e; Y/Y: 13.5% v 13.2%e.
  • (FR) France Dec Preliminary PMI Manufacturing: 54.9 v 55.4e (13th month of expansion); PMI Services: 57.1 v 56.0e; PMI Composite: 55.6 v 55.0e.
  • (DE) Germany Dec Preliminary PMI Manufacturing: 57.9 v 57.0e (18th month of expansion); PMI Services: 48.4 v 51.0e; PMI Composite: 50.0 v 51.2e.
  • (CH) SNB left both Policy Rates unchanged at -0.75% (as expected).
  • (HK) Hong Kong Nov Unemployment Rate: 4.1 v 4.2%e.
  • (SE) Sweden Nov Unemployment Rate: 7.5% v 7.6% prior; Unemployment Rate (seasonally adj): 8.3% v 8.4%; Trend Unemployment Rate: 8.5% v 8.6% prior.
  • (TW) Taiwan Central Bank (CBC) left its Benchmark Interest Rate unchanged at 1.125%(as expected).
  • (EU) Euro Zone Dec Preliminary PMI Manufacturing: 58.0 v 57.8e (17th month of expansion); PMI Services: 53.3 v 54.3e; PMI Composite: 53.4 v 54.2e.
  • (NO) Norway Central Bank (Norges) raised the Deposit Rates by 25bps to 0.50% (as expected).
  • (IT) Italy Oct Total Trade Balance: €3.9B v €2.4B prior; Trade Balance EU: €0.3B v €0.8B prior.
  • (UK) Dec Preliminary PMI Manufacturing: 57.6 v 57.6e (19th straight expansion); PMI Services: 53.3 v 57.0e; PMI Composite: 53.3 v 56.3e.
  • (EU) Euro Zone Oct Trade Balance (seasonally adj): €2.4B v €5.8Be; Trade Balance NSA (unadj): €3.6B v €7.3B prior.
  • (EU) Euro Zone Q3 Labour Costs Y/Y: +2.5% v -0.1% prior.

Fixed income Issuance

  • None seen.

Looking ahead

  • (EG) Egypt Central Bank Interest Rate Decision (no set time): Lending Rate current at 9.25%; Deposit Rate currently at 8.25%.
  • 05:25 (EU) Daily ECB Liquidity Stats.
  • 05:30 (HU) Hungary Debt Agency (AKK) to sell bonds.
  • 05:30 (EU) ECB allotment in 3-year TLTRO III tender (10th round) (prior €97.6B with 152 bids recd).
  • 06:00 (TR) Turkey Central Bank (CBRT) Interest Rate Decision: expected to cut One-Week Repo Rate by 100bps to 14.00%.
  • 06:00 (IL) Israel Q3 Preliminary GDP (2nd reading): No est v 2.4% advance.
  • 06:00 (BR) Brazil Central Bank (BCB) Quarterly Inflation Report (QIR).
  • 06:45 (US) Daily Libor Fixing.
  • 07:00 (UK) Bank of England (BOE) Interest Rate Decision: Expected to leave Bank Rate unchanged at 0.10%; Expected to maintain Total Asset Purchases at £895B (Gilt Purchase Target unchanged at £875B and Corporate Bond Target unchanged at £20B).
  • 07:45 (EU) ECB Interest Rate Decision: Expected to leave Key Rates unchanged; Expected to leave Main 7-Day Refinancing Rate unchanged at 0.00%; Expected to leave Marginal Lending Facility unchanged at 0.25%; Expected to leave Deposit Facility Rate unchanged at -0.50%.
  • 08:00 (RU) Russia Gold and Forex Reserve w/e Dec 10th: No est v $622.8B prior.
  • 08:00 (PL) Poland Nov CPI Core M/M: 0.4%e v 0.7% prior; Y/Y: 4.7%e v 4.5% prior.
  • 08:00 (UK) Daily Baltic Dry Bulk Index.
  • 08:30 (US) Nov Housing Starts: 1.567Me v 1.52M prior; Building Permits: 1.663Me v 1.653M prior (revised from 1.650M).
  • 08:30 (US) Initial Jobless Claims: 200Ke v 184K prior; Continuing Claims: 1.94Me v 1.992M prior.
  • 08:30 (US) Dec Philadelphia Fed Business Outlook Survey: 29.1e v 39.0 prior.
  • 08:30 (CA) Canada Oct Wholesale Trade Sales M/M: 1.5%e v 1.0% prior.
  • 08:30 (US) Weekly USDA Net Export Sales.
  • 08:30 (EU) ECB chief Lagarde post rate decision press conference.
  • 09:15 (US) Nov Industrial Production M/M: 0.6%e v 1.6% prior; Capacity Utilization: 76.8%e v 76.4% prior; Manufacturing Production: 0.7%e v 1.2% prior.
  • 09:45 (US) Dec Preliminary Markit PMI Manufacturing: 58.5e v 58.3 prior; Services PMI: 58.8e v 58.0 prior; Composite PMI: No est v 57.2 prior.
  • 10:30 (US) Weekly EIA Natural Gas Inventories.
  • 11:00 (US) Dec Kansas City Fed Manufacturing Activity Index: 25e v 24 prior.
  • 14:00 (MX) Mexico Central Bank (Banxico) Interest Rate Decision: Expected to raise Overnight Rate by 25bps to 5.25%.
  • (EG) Egypt Central Bank Interest Rate Decision.
  • 14:00 (AR) Argentina Q3 GDP Q/Q: No est v -1.4% prior; Y/Y: 12.0%e v 17.9% prior.
  • 14:00 (AR) Argentina Oct Capacity Utilization: No est v 64.4% prior.
  • 16:00 (NZ) New Zealand Dec Consumer Confidence Index: No est v 96.6 prior.
  • 19:00 (NZ) New Zealand Dec Business Confidence: No est v -16.4 prior; Activity Outlook: No est v 15.0 prior.
  • 19:01 (UK) Dec GFK Consumer Confidence: -17e v -14 prior.
  • 19:30 (SG) Singapore Nov Non-oil Domestic Exports M/M: No est v 4.2% prior; Y/Y: 15.3%e v 17.9% prior; Electronic Exports Y/Y: No est v 14.9%.
  • 22:00 (CN) China to sell 50-yaer Upsize Bond.
  • (JP) Bank of Japan (BOJ ) Interest Rate and Policy Decision: expected to leave Interest Rate on Excess Reserves (IOER) unchanged at -0.10% and maintain 10-year Yield Target (YCC): at 0.00%.
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