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  1. BoE React: Fly Me to the June

    Henry Occleston

    Summary The BoE struck a more dovish tone, with comments suggesting they are strongly considering cutting in June if the data allows. This remains our base case. Bailey strongly indicated that they expect to need to cut more than the market is pricing, but that they will attempt to cut hawkishly (i.e. keep market pricing […]

  2. BoE Preview: Dovish MPR Should Open Way for Cutting

    Henry Occleston

    Summary We expect the BoE will leave rates unchanged at next week’s meeting. However, a more dovish inflation forecast should open the door to explicitly discussing cuts. The BoE will ultimately want their first cut to be a hawkish one, and for the market not to price too much subsequent easing – a well telegraphed […]

  3. Key Events: Hawkish Fed Risks

    5 researchers

    We are updating our key events report. From now on, you will receive a short document to prepare you for the week ahead. This new form focuses on a curated list of data/events, as well as key central bank meetings and market views across G10 and EM. Key Events G10 In the US, there are […]

  1. Key Events: Fed in ‘No Rush to Cut Rates’

    4 researchers

    Skip to: US, Rest of G10, EM US With Dominique away this week, Antonio Del Favero covers the key US data for the coming days. Summary No Fed speakers next week as we enter the blackout period pre-FOMC (1 May). As expected, Fed speakers reacted to the third hot inflation print, confirming ‘no rush to […]

  2. Key Events: Inflation No Longer Just a ‘Bump in the Road’

    5 researchers

    Skip to: US, Europe, Rest of G10, EM US With Dominique away, this week’s US section is covered by Macro Hive strategist Antonio Del Favero. Summary Inflation is no longer consistent with a June cut. I expect that only a recession can push inflation back down to target and below. Fed speakers will give their […]

  3. Key Events: Could the BoE Add Dot Plots?

    5 researchers

    Skip to: US, Europe, Rest of G10, EM US Summary March CPI and PPI are likely to be consistent with a June cut. Fed speakers will give their take on yet another bumper NFP. Market Implications I still expect the Fed to start cutting in June. Fed This week Chair Powell stated that ‘the recent […]

Key Events: It Is a Dove World

5 researchers

Note: Due to the upcoming holidays, this week’s Key Events covers an extended period, from 25 March to 5 April. Skip to: US, Europe, Rest of G10, EM US Summary February core PCE to support Fed narrative. NFP to show cooling wage growth but strong employment. Market Implications I expect the Fed to start cutting […]

BoE Preview: Inflation to Drive Tone

Henry Occleston

Summary In line with the market, I expect the BoE will leave its bank rate unchanged at 5.25% once again. There is room for a change among external voters. I expect a reduction in votes for hikes; Mann could be the sole backer. Wage and services inflation data has undershot MPR expectations of late. But […]

  1. Momentum Models Scale Back USD/JPY Bullishness

    Bilal Hafeez, Ben Ford

    When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models moved sideways over the past week. A positive rates (+0.3% WoW) outing battled poor equity (-0.4% WoW) and FX (-0.1% WoW) performances. Equity momentum models remain the best-performing model over […]

  2. Markets to Watch: Watch Out For ‘More Good’ Jobs Data

    Bilal Hafeez, Viresh Kanabar

    Summary In the US, Powell’s congressional testimony (Wednesday) will likely stress the need for more good inflation data before the Fed can cut. Nonfarm payrolls and wages (Friday) are likely to surprise on the upside. In Europe, the ECB should keep rates steady on Thursday but revise forecasts. We still expect a June cut at […]

  3. BoE Monitor: Why Cut in June, Not August?

    Henry Occleston

    Summary The BoE has announced Broadbent’s replacement in Lombardelli. Unsurprisingly, the market has taken it hawkishly, but we are wary of reading too much into it. The arguments for waiting until the August MPR for the BoE’s first cut have merit. But if the data develops as we expect, they may be unable to wait […]

Markets to Watch: Will the Fed React to CPI Revisions?

Bilal Hafeez, Viresh Kanabar

Summary In the US, Friday brings seasonal factor revisions to the CPI. These could impact the path of the FFR. Currently Powell seems set on no rate cut in March. Europe and the UK hear from central bank policymakers and see several key surveys updated, including the services PMIs. Elsewhere, a slew of central bank […]

BoE React: Labour Market Will Determine When to Cut

Henry Occleston

Summary The BoE kept rates unchanged at their February meeting, as expected. Also as expected, forecasts were updated to be more dovish near term, but with a higher trajectory in inflation further out. The more hawkish end-horizon forecast was supported by a reduced trajectory for unemployment growth. Governor Bailey pushed back on market pricing for […]

  1. BoE Preview: MPR to Create More Dovish Foundation

    Henry Occleston

    Summary With little new data, I expect the BoE will leave bank rate unchanged at 5.25% again. The voting pattern will be interesting, with room for change among external voters: I expect a reduction in votes for hikes; Mann could be the sole backer. I expect Dhingra will be the sole voter for a cut. […]

  2. Markets to Watch: Bonds Beware as QRA Emerges

    Bilal Hafeez, Viresh Kanabar

    Summary In the US, the Fed meets on Wednesday. We expect them to hold rates steady while preparing markets for a cut in March. In the UK, the BoE will likely hold rates unchanged on Thursday, taking a more dovish profile in the near term. January CPI is the main release of the week for […]

  3. G10 FX Weekly: EUR/GBP Enters the Buy Zone

    Richard Jones

    Summary Since last May, EUR/GBP has traded in a ~0.8500/~0.8800 range. This week, EUR/GBP printed its lowest levels since September, primarily catalysed by a hawkish pricing tilt in BoE expectations. We think this hawkish BoE pricing has gone too far and that ECB easing will be less aggressive than the market currently prices. Market Implications […]

UK Private Regular Wages Fall

Henry Occleston

Summary It was another reduced labour market release (full labour force survey data will be corrected and updated in January hopefully). But what we did get was dovish. Total weekly wage growth dropped 0.8ppt (from an upwardly revised +8.0% YoY) to +7.2%. Meanwhile, regular pay dropped 0.5ppt from an upwardly revised +7.8% in September. Most […]

BoE Preview – Santa Pause

Henry Occleston

Summary With little new by way of data, we expect the BoE will leave bank rate unchanged at 5.25% once again (6:3 vote), with little change to tone. A more substantial change in tone could come in February once we’ve had corrected LFS data and new inflation prints. For now, we look through the recent […]

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