Viresh Kanabar
Summary The BoK hiked 25bp to 3%, with a decisive 6-1 vote, showing that KRW’s 7% rally mattered less than elevated energy prices, robust growth and future inflation risks from AI spillovers. Shin framed the move as pre-emptive tightening, aimed at anchoring inflation expectations and leaning against Seoul housing and household debt before a more […]
Viresh Kanabar
Summary Since the June meeting, the data continues to point to resilient growth, rising inflation expectations, stronger energy/FX-driven price pressures and still-accommodative financial conditions. These three events have pushed Japan’s front-end pricing higher: the Summary of Opinions, Tamura’s June speech and recent reports have all pointed to greater openness to faster normalisation. Tamura matters because […]
Viresh Kanabar
Summary The BoK unanimously hiked 25 bp to 2.75%, as expected, but the focus has shifted from the initial oil/FX inflation shock to demand-driven inflation and financial stability risks. The AI boom is now central to the BoK’s reaction function, with stronger exports and investment leading the Bank to upgrade 2026 growth significantly above 2.6% […]
Viresh Kanabar
Summary The BoJ hiked 25bp to 1%, as expected, with Asada dissenting but not materially shifting the Board’s broader balance. The statement and Uchida’s press conference reinforced the message: policy remains accommodative even after the move to 1%. Coupled with recent speeches, the implication is that the BoJ now appears to see 1.5% as the […]
Antonio Del Favero
Summary The ECB delivered a 25bp hike as expected, but the hawkish bias was clear. Revised core inflation higher, with risks skewed to the upside. Robust-across-scenarios framing. No peak language. Forecasts were conditioned on rates already 75bp above pre-cycle levels. This leaves further tightening on the table, barring a collapse in oil prices. Market Implications […]
Viresh Kanabar
Current Views Please see our latest views below: Latest Changes ADDED: Bearish 10y Gilts –UK political risks rising as Starmer leadership in doubt. ADDED: Bearish 10y UST – Added at 4.35% on loose FCs supporting growth, high deficit, strong US data and inflation fears. ADDED: Bullish 2y UST – Tactically added 2y at 4% to reduce […]
Viresh Kanabar
Summary The RBA hiked by 25 bps as the market expected. The decision was more one-sided than we thought due to their desire to set the policy rate in restrictive territory. The RBA also hawkishly revised its forecast, with trimmed-mean inflation now expected to reach 3.5% YoY by year-end, despite a 4.7% cash rate. Despite […]
Viresh Kanabar
Summary Tomorrow’s RBA is unlikely to be as clear cut as consensus makes up who expect a further 25 bps rate hike. In favour of a hike is a still tight labour market, loose financial conditions sustaining strong credit growth, and rising inflation expectations. Arguing against a rate hike is the RBA’s desire to ‘go […]
Antonio Del Favero
Summary Oil and SoH drive rates, not central banks: Short-end rates (EUR, GBP, AUD, NZD) are currently tightly linked to oil prices, which depend on the Strait of Hormuz (SOH) situation. Oil up, short-end rates up, and vice versa. There is an oil price level where the short end can disconnect from the oil price, […]
Viresh Kanabar
Current Views Please see our latest views below: Latest Changes ADDED: Bullish SOFR Jun 27 – Fed could be dovish with new Chair, particularly if economy weakens. Recent Reports on Active Views FX Bullish CHF/JPY – Given the rally in EUR/CHF, the likelihood of intervention has fallen. Meanwhile, the BoJ remains dovish, considering a demand […]
Antonio Del Favero
Summary The MPC will hold at 3.75%, most likely 7-2, with Pill and Greene dissenting. The split between 7-2 and 8-1 or 9-0 remains an extremely close call. Honestly, if Mann were to join (7-3), we would not be too surprised. However, we do not expect this to happen. Post-March data tells two conflicting stories: […]
Antonio Del Favero
Summary Hold in April, hike in June — the modal path. My preference is back-to-back June/July moves, but it is too early to be sure. Stagflationary risks: growth softer than expected, inflation at the top of the baseline range and set to push higher in May as core rebounds. ECB 1Y and 3Y CPI expectations […]
Viresh Kanabar
Summary Despite inflation implications, the BoJ is likely to treat the energy shock as a demand shock first and foremost. We expect the BoJ to lift its headline inflation forecast for 2026, but this is of little importance relative to Gov Tamura’s decision to hold or hike. Elsewhere, we believe loose financial conditions are leading […]
Viresh Kanabar
Current Views Please see our latest views below: Latest Changes ADDED: Bullish FX Carry (tactical) – Our driver-based system shifted strongly bullish as high-yielder tail risk pricing eased, taking us into a +1.1 Sharpe backdrop. ADDED: Bearish USD/CNH (tactical) – Onshore demand for dollars has faded, while the PBOC is allowing a managed appreciation in […]
Viresh Kanabar
Current Views Please see our latest views below: Latest Changes ADDED: Bullish 10y CGB – Domestic inflation remains weak thanks to tepid credit growth despite higher energy prices allowing yields to move lower. ADDED: Bullish CHF/JPY – Given the rally in EUR/CHF, the likelihood of intervention has fallen. Meanwhile, the BoJ remains dovish, considering 8a […]
Viresh Kanabar
Summary The RBNZ kept rates on hold as expected by unanimous decision. Despite the hold, the market read the RBNZ’s statement hawkishly after the statement suggested a faster hiking path was discussed during the meeting. However, any discussions on hikes seemed to be conditional on the outlook, but also limited to the speed of movement, […]
Viresh Kanabar
Summary Recent RBNZ speeches have laid the framework for future decision-making. Gov. Breman set out three channels through which the current Middle East conflict can impact domestic prices, the most important being second-round effects. She also emphasised the very real negative consequences for demand stemming from hits to corporate profit margins and weaker disposable income. […]
Viresh Kanabar
Current Views Please see our latest views below: Latest Changes ADDED: Bullish Gold (short-term) – We flip our gold stance from bearish to bullish after a significant correction, $12bn in western ETF outflows, and signs of decoupling versus equities. ADDED: Bullish EUR/GBP – EUR/GBP is not currently correlated to energy prices and is at risk […]
Viresh Kanabar
Current Views Please see our latest views below: Latest Changes ADDED: Bullish USD/CAD – Expected Fed-BoC rate differentials and weaker Canadian growth dynamics support upside toward 1.40. ADDED: Bearish 1y1y NZD vs. 1y1y EUR – Overly hawkish RBNZ pricing looks misaligned with soft growth, excess capacity, and limited inflation persistence. Recent Reports on Active Views […]
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