Jul 4
FOMC: preview of policy meeting
On Wednesday, at 20:15 CET, the Federal Open Market Committee (FOMC) is set to announce its policy decision. In line with consensus we expect the FOMC to keep the Fed funds rate unchanged in the range of 0.00-0.25%. The meeting will be a balancing act. On the one hand, there are members of the FOMC who fear that inflation expectations will run rampant unless the Fed states that it is ready with exit strategies. On the other hand, other members worry about the market’s aggressive expectations
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Jul 4
Switzerland: SNB rate decision June 18th
The Swiss National Bank (SNB) will hold its monetary policy meeting on Thursday June 18th.The SNB is expected to hold rate policy steady at 0.00%-0.75%.Recent Swiss economic data confirms deteriorating Swiss economy and declining inflation. Monday, Switzerland reported that producer and import prices declined the most in two decades. Swiss Q1 GDP contracted at its fastest pace in 15 years and Swiss May inflation fell at its fastest rate in 50 years. Swiss exports fell 14% since the start of
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Jul 4
BOE Preview: June interest rate decision
MPC is expected to vote unanimously to leave rates on hold at 0.5% and leave the QE programme size unchanged at GBP 125bln Today’s announcement is unlikely to spring any major surprises with focus again on discussions surrounding the QE program following the Bank’s brief statement on June 4th that the current programme would take another 2 months to complete. Recent economic data The MPC will likely pay note to the glimmers of improvement that have been seen in various economic indicators
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Jul 4
Japan: BoJ slightly more positive on the economy
Bank of Japan (BoJ) as expected left its leading interest rate unchanged at 0.1% and did not see the need for further non-conventional easing. BoJ turned marginally more positive on the economy. However, the main message continues to be that the economy is bottoming out. The focus at the future monetary meetings will mainly be on changes in BoJ’s view of the economy. The next major change in outlook by the bank should be to regard the economy as expanding. However, this change is unlikely to
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Jul 4
Japan: Bank of Japan preview
With signs that the economy is stabilising and financial stress easing, we do not expect BoJ to announce new quantitative easing measures in connection with the close of its monetary meeting tomorrow. BoJ’s view of the economy is expected to be marginally more positive. However, a substantial change in its view of the economy is more likely to happen at the July meeting. We expect BoJ to start tightening in Q3 10. However, a ‘technical’ rate hike to improve the functionality of the money
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Jul 4
ECB meeting: Positive signals ignored
- ECB kept the refinancing rate unchanged at 1.0%. We expect the interest rate to be kept on hold for at least a year. - Staff projections for growth were revised downwards – in particular for 2009. The ECB projects the economic decline to be slower for the rest of the year than it was in Q1, but does not see positive growth before mid 2010. We believe this is far too negative. - The purchase of covered bonds for EUR 60bn will be directed towards purchases in both the primary and secondary
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Jul 4
ECB Review: no surprises
As expected, the ECB left all the rates unchanged, with the refi standing at 1.00% , and unveiled the relevant details of the upcoming covered bonds purchase program. The main points of today’s press conference are. On the "traditional" monetary policy front: The ECB confirms that the 1.0% refi rate level is appropriate at this time, but also that it is not a pre-decided floor . We still believe rates will remain at 1.0%, as long as that the ECB’s (and our) baseline scenario holds. Staff
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Jul 4
BOE Preview: June interest rate decision
Current Base Rate: 0.50% Consensus: 0.50% The MPC is expected to keep rates on hold for a third month at its June meeting and adopt a 'wait and see' approach as economic indicators, show some signs of improvement in the economy. It remains a moot point why the BOE chose not to deploy the additional GBP 25bln assigned for quantitative easing (QE) after a dovish May Inflation Report pointed to an uncertain outlook, as well as a 'relatively slow and protracted' recovery. The BOE may have felt
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Jul 4
ECB preview: It could be a non-event
We are confident that the ECB will leave the refinancing rate unchanged at 1.0%. We expect the ECB to keep rates unchanged for a prolonged period before they begin to hike. The focus will therefore be on the press conference. We will look for signs that the ECB rhetoric is becoming more positive, but we don’t expect much. We do not anticipate the ECB to announce additional measures or top up on already announced measures. All in all, this might be a relatively dull ECB meeting - for a change.
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Jul 4
Czech Republic: CNB keeps interest rates on hold
At today’s monetary policy setting meeting the Czech central bank decided to leave its key policy rate unchanged at 1.50%. Details The Czech central bank (CNB) surprised markets at its monetary policy setting meeting today when it decided to maintain its key policy rate at 1.50% even though most market participants had expected a further 25bp rate cut. We thought the CNB would leave interest rates on hold. Market reaction: EUR/CZK is marginally higher while 2y yields increased approximately
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