Central Bank Views
SNB Maintains World’s Lowest Policy Rate
SNB left the policy rate unchanged at -0.75% in December. Again, the members reiterated the commitments to intervene in the currency in order to curb the appreciation of Swiss franc, which is described as “highly-valued”. They also affirmed to maintain the expansionary monetary policy so as to lift inflation...
Fed Set a Neutral Tone and Signaled that Rate will Stay Unchanged Throughout 2020
As widely anticipated, FOMC left the Fed funds rate unchanged at 1.5-1.75% in December. Trying to deliver a neutral tone, there were only few changes in the policy statement and the updated economic projections. The median dot plot shows that the members expect the policy rate to remain the...
Fed to Leave Policy Rate Unchanged in December, and Likely for 2020
We expect the FOMC will leave the Fed funds rate unchanged at 1.5-1.75% in December. The employment report released last week confirmed a resilient job market. Other indicators showed little deviation from the trend observed in October. Indeed, unless global and domestic conditions deteriorate materially, it is likely that...
BOC Unexpectedly Turned More Upbeat in December
BOC left the policy rate unchanged at 1.75% in December. The accompanying statement turned more hawkish than October. Despite ongoing trade war uncertainty, policymakers remained upbeat about the domestic economic growth. They also acknowledged that the global economy has stabilised. It now appears that the central bank would prefer...
BOC to Stand on the Sideline in December, while Noting Possible Rate Cut
Despite the dovish surprise in October, we expect BOC to leave the policy rate unchanged at 1.75% this week. Economic data released during the inter-meeting period stayed firm, allowing the central bank to take more time to monitor the situation. However, it will continue to warn that US-China trade...
RBA Left Cash Rate Unchanged but Hinted To Ease Further
As widely anticipated, RBA left the cash rate unchanged at 0.75% in December. The central bank was cautiously optimistic about domestic economic development. While seeing turning points on the economic in general and the housing market in particular, the members remained concerned about consumption and the job market. They...
FOMC Minutes Revealed that Most Members Saw Current Rate Level as Appropriate
The FOMC minutes for the October meeting revealed that most members judged that the monetary easing was enough to support growth. However, they continued to see downside to the economic outlook.
In October, the members voted to cut the Fed funds rate by -25 bps to a range of 1.5-1.75%....
RBA Minutes: Members Considered Rate Cut This Month. Disappointing Job Report Raises the Case for Further Easing
RBA’s minutes for the November meeting sent a more dovish tone than expected. At the Statement of Monetary Policy, the members noted that “the Board was mindful that rates were already very low and that each further cut brings closer the point at which other policy options come into...
RBNZ Unanimously Left OCR at 1%. Rate Cuts Next Yet Still Likely
RBNZ left the OCR unchanged at 1% in October. The members acknowledged that inflation stayed below the midpoint of the 2% target and inflation forecasts have declined. Yet, they believe previous monetary easing should lift the price level back to target. Meanwhile, they noted that weakness in exchange rate...
RBNZ Preview – Market Divided over Another Rate Cut Move This Week
The market remains divided over whether RBNZ would lower the OCR this week. Back in August, the market had fully priced in a rate cut of -25 bps. Yet, the central bank surprised with a -50 bps reduction, sending the policy rate to 1%. Currently, the market has priced...
BOE Left Policy Rate at 0.75%. Two Members Voted for Easing
Although the Bank rate stayed unchanged at 0.75% as expected, it is surprising to see two members voted for a rate cut. At the minutes, BOE has left the door open for a rate cut for the first time. British pound slumped as the message came in more dovish...
RBA Left Cash Rate Unchanged at 0.75%, Maintained Dovish Bias as Members Struggle to Bring Jobless Rate Lower
As expected, RBA left the cash rate unchanged at 0.75%. Dovish bias remains as policymakers struggled to bring down the unemployment rate and boost inflation. Economic developments showed “little changed“. The members affirmed that “a gentle turning point appears to have been reached“. A quarterly Statement on Monetary Policy...
BOE Preview – Maintaining Dovish Stance although No-Deal Brexit Less Likely
The chance of no-deal Brexit appears to have diminished after Article 50 is further extended to January 2020 and the parliament will hold snap elections in December. However, domestic growth has shown signs of moderating and unemployment rate is bottoming. We expect BOE to maintain the slightly dovish tone...
Turning Dovish, BOC Discussed about Insurance Rate Cut for First Time In October
BOC turned dovish in the October meeting, while maintaining the policy rate unchanged at 1.75%. For the first time, the central bank discussed about “insurance” rate cut, citing trade war’s damage to business investment and exports. The announcement sent the loonie lower, giving half of the gains made earlier...
Fed Signals to Pause after a Third Rate Cut
FOMC delivered a hawkish cut at the October meeting. The central bank lowered the Fed funds rate, by -25 bps, to 1.5-1.75%. Yet, the Fed removed the language that it will act to sustain expansion at the forward guidance. This appears that the Fed has prepared to pause after...
FOMC Preview – Third Rate Cut on Table. Will Fed Signal A Pause or More to Come?
The market has almost fully priced in a rate cut of -25 bps in the FOMC meeting this week. Some in the market are speculating that the Fed would change the forward guidance. Some expect the central bank to signal a temporary end to rate cut in October. This...
BOC Preview – Policy Rate will Stay Unchanged. But for How Long?
Although the Fed and ECB have resumed monetary easing, BOC is not expected to follow suit. This is also the key reason for the recent strength in Canadian dollar. At the meeting next week, we expect the central bank to leave the policy rate unchanged at 1.75%.
Upside surprise in...
ECB Review – Outgoing Draghi Defended the Need to Easing Package
President Mario Draghi’s last ECB meeting came in without surprise. He sent a cautiously dovish message about Eurozone’s economy and reiterated the importance of the stimulus package announced last month. The new leadership will likely maintain the existing policy stance unless there are dramatic changes in the domestic and...
ECB Preview – President Draghi’s Last Speech to Remain Dovish as He Leaves a Divided ECB to Lagarde
In his last meeting as the president, Mario Draghi is not expected to announce any new measures. Rather, he would be defending the needs of the stimulus package announced in September and urging for a bigger role in fiscal policy. Economic data released since the last meeting have surprised...
RBA Minutes – Sending Dovish Message by Rebuking Arguments in Favor of Keeping Rates Unchanged
In the minutes for the October meeting, RBA revealed the debate for the -25 bps rate cut. The key reasons for lowering the policy rate to 0.75% are disappointing employment and inflation data, as well as downside risk to global economic outlook. These outweighed the arguments for staying put,...