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Central Bank Monitorssee more…

  1. FOMC Review: A Dovish 25bp Cut

    Dominique Dwor-Frecaut

    Summary As expected, the Fed cut 25bp, and against expectations added one cut to the 2025 dot. Chair Powell cited a shift in the balance of employment and inflation risks as the primary reason and characterised the cut as risk management. Powell did not commit to a policy path, reflecting the lack of clarity on […]

  2. BoJ Preview: Insufficient Data and Downside Risks to Ensure a September Hold

    Viresh Kanabar

    Summary Japan’s economy remains robust despite tariffs uncertainty, though recent trade data suggests real exports to the US have slowed. During his last speech, Governor Himino (median member) highlighted downside inflation risks are more prevalent now, continued require monitoring. We view Governor Ueda’s discussion around the BoJ’s urgency to hike as guidance towards an October […]

  3. BoC Preview – Balancing Act Ends: Labour Market Risks Trump Inflation

    Viresh Kanabar

    Summary Canada’s economy has averaged 6k monthly job losses recently, while the unemployment rate is up to 7.1%. Combined with cooler core inflation data, the BoC can resume focus on the labour market to prevent further loosening. Market Implications We expect the BoC to cut 25bp on Wednesday. We think material risk exists of a […]

  1. BoJ Review – Lack of Urgency Keeps JPY Shorts in Control

    Viresh Kanabar

    Summary The BoJ maintained its policy rate today as expected. The BoJ still sees a sluggish growth outlook, while supply pressures stemming from higher food prices pushed 2025 inflation higher. Governor Ueda’s tone during the presser was dovish as he reiterated a US trade deal alone is insufficient to prompt a further hike. He also […]

  2. FOMC Review: Powell Lays Ground for September Cut

    Dominique Dwor-Frecaut

    Summary The Fed did not cut as expected. Chair Powell prepared the ground for a September cut with a more positive inflation outlook and an acknowledgement of downside labour market risks. If unemployment remains within the current range, my base case, a 25bp cut is likely at September’s FOMC. Following the meeting, market pricing of […]

  3. FOMC Preview: A September Risk Management Cut Comes Into View

    Dominique Dwor-Frecaut

    Summary Employment risks are rising due to weaker growth that itself reflects low private sector confidence and continued extreme policy uncertainty. Weak growth is containing US tariffs’ passthrough, but long-term inflation risks are increasing. Long-term market-based inflation expectations remain stable while survey-based expectations are falling. The real economy and financial markets suggest the Fed’s policy […]

UK Labour Market – Unemployment Rate Rises on Participation, Details Still Bearish

Henry Occleston

Summary The release sustains UK bearishness. Vacancies dropped, PAYE employment continued declining, wage growth undershot MPR. The unemployment rate rising is largely immaterial – LFS is a non-credible data source, and it was driven by a jump in the participation rate. Our view remains that the labour market is loosening faster than the BoE expects. […]

Upside Surprise in UK June CPI, BoE Will Be More Interested in Labour Market

Henry Occleston

Summary UK headline inflation ticked back up in headline and core and remained stable in services. This was a broad beat versus consensus and slightly above MPR expectations. Beats in food appear to be beef and dairy related. But we would not write this off as transitory given sector inflation has been rising consistently YoY […]

  1. BoE Review: Statement Slightly More Dovish, Expect August Cut

    Henry Occleston

    Summary The MPC voted for no change in bank rate (4.25%), as expected. Minimal statement changes included adding a clearer indication of ‘slack opening up’ in the UK economy. We still expect the BoE to cut again in August and cut to 3.5% this year. Market Implications We remain long SFIZ6 in our model portfolio, […]

  2. FOMC Review: Hints of September Cut

    Dominique Dwor-Frecaut

    Summary As expected, the Fed remained on hold and the 2025 dot showed two cuts. The FOMC economic assessment was unchanged and is more hawkish than recent data, which could reflect concerns the inflationary impact of tariffs is yet to come. The meeting has added to my conviction for a September cut as Macro Hive’s […]

  3. May Inflation to be Mixed, BoE to Pause but Expect More Cuts From August

    Henry Occleston

    Summary With no presser and no update to forecasts, the BoE’s policy announcement is unlikely to be eventful. While cracks continue growing in the UK economy, data has not derailed sufficiently enough for the BoE to change tack. We expect inflation to roughly align with May’s MPR: headline below consensus but core higher. We analyse […]

Dom’s Quick Take: 2025 Dot to Show Two Cuts

Dominique Dwor-Frecaut

Summary Following below-expectations CPI and above-expectations jobless claims, I now expect next week’s 2025 and 2026 dots to show two cuts each, from one and three cuts in my Fed preview. It is too early for the FOMC to form a view on the impact on the outlook of Israel’s most recent attack on Iran. […]

FOMC Preview: 2025 Dot to Show One Cut

Dominique Dwor-Frecaut

Summary Since May’s FOMC, soft data weaknesses have started transmitting to hard data and the impact of tariffs on inflation has been limited, though it is early days. FOMC members’ overall objective is to prevent a de-anchoring of long-term inflation expectations and a permanent inflation increase. The SEP is likely to still show a soft-landing […]

  1. ECB Review: Hawkish Cut, but Do Not Rule Out Another Cut This Year Just Yet

    Henry Occleston

    Summary The ECB cut 25bp as expected. The presser was more hawkish, especially around comments that they are ‘in a good place’ after the cut. This and the updated dovish forecasts suggests room for the economy to outperform, further quashing need for another cut. However, we are wary that their assumptions on tariffs look optimistic. […]

  2. BoC Review: July Cut Base Case, Assuming Inflation Behaves

    Viresh Kanabar

    Summary Governor Macklem executed a dovish hold during yesterday’s BoC meeting. Three themes emerged during the presser: Uncertainty is weighing on Canada’s economy. Inflation remains too high. A cut and a pause were discussed, with inflation data leading to a pause. Market Implications We believe the BoC will next cut its policy rate in July. […]

  3. ECB Monitor: When to Fade ECB Cuts

    Henry Occleston

    Summary The ECB will likely cut rates by 25bp this week given trade tensions and the recent CPI miss. While the doves will hold the reins near term, pushbacks should begin to grow. Updated medium-term forecasts must contend with low productivity growth, labour market tightness and rising fiscal spending. We do not think the ECB […]

BoC Preview: On Hold, but More Cuts to Come

Viresh Kanabar

Summary May’s labour data showed further loosening with the unemployment rate rising to 6.9%. However, this data was overshadowed by hotter inflation and consumption data. While one-offs have mostly driven inflation higher, core inflation above 3.5% remains too hot to allow the BoC to cut further. Falling household savings suggest consumers are loosening their belts […]

Fed Monitor: Still Expect a July Cut

Dominique Dwor-Frecaut

Summary Post-‘Liberation Day’ inflation and available hard economic data have been soft. Policy uncertainty has fallen but remains high. Inflation expectations have fallen or remain consistent with the 2% Fed target. The Fed has turned hawkish, possibly due to limited post-tariff data availability and to a perceived need to assert its independence. With data softness […]

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