Global | Monetary Policy & Inflation | Politics & Geopolitics
After a flurry of major DM central bank meetings last week, this week is quiet in terms policy meetings. There is, however, plenty of Fedspeak with Chair Powell and others scheduled throughout the week. Tuesday’s scheduled speech by BoE Governor Bailey will also be watched closely after last week’s confirmation that negative rates are under consideration. Central banks in Sweden, Norway and Switzerland are all expected to leave rates unchanged.
Several EM central banks hold policy meetings this week. No change is expected to the loan prime rate in China on Monday, while Czech Republic and Thailand are also expected to hold rates steady on Wednesday. Thursday brings rate meetings in Mexico and Turkey. With inflation running above target, Banxico are expected to reduce the pace of easing with consensus expecting a 25bps cut to 4.25%. A pause in the easing cycle cannot, however, be ruled out. For the CBRT, the consensus is for rates on hold at 8.25%, but given the fresh record-low for the lira last week several economists are calling for a rate hike this week.
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Monetary Policy
After a flurry of major DM central bank meetings last week, this week is quiet in terms policy meetings. There is, however, plenty of Fedspeak with Chair Powell and others scheduled throughout the week. Tuesday’s scheduled speech by BoE Governor Bailey will also be watched closely after last week’s confirmation that negative rates are under consideration. Central banks in Sweden, Norway and Switzerland are all expected to leave rates unchanged.
Several EM central banks hold policy meetings this week. No change is expected to the loan prime rate in China on Monday, while Czech Republic and Thailand are also expected to hold rates steady on Wednesday. Thursday brings rate meetings in Mexico and Turkey. With inflation running above target, Banxico are expected to reduce the pace of easing with consensus expecting a 25bps cut to 4.25%. A pause in the easing cycle cannot, however, be ruled out. For the CBRT, the consensus is for rates on hold at 8.25%, but given the fresh record-low for the lira last week several economists are calling for a rate hike this week.
Data
Flash PMIs on Wednesday will be the main data highlight this week while US jobless claims will also be in focus. Taiwan’s export orders are also key to watch if the tech-driven export bounce is set to continue.
Events
Thursday’s FTSE Russell decision on inclusion of Chinese bonds into its World Government Bond Index will be a key driver of yuan performance, attracting significant inflows should the inclusion be confirmed.
Dominique Dwor-Frecaut is a macro strategist based in Southern California. She has worked on EM and DMs at hedge funds, on the sell side, the NY Fed, the IMF and the World Bank. She publishes the blog Macro Sis that discusses the drivers of macro returns.
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)