Sunset Market Commentary

In yet another dull trading day the weak SEK (cf. below) and JPY stand out. The yen is not impressed by Ueda ramping up warnings. It began in Asian dealings, where the BoJ governor said that a policy response (i.e. rate hike) could be needed depending on the currency’s moves. Ueda said a weak JPY affects inflation and is therefore a key variable in the analysis. Finance minister Suzuki around the same time aired the usuals:

German Industrial Production Slide Brings Closer ECB's Rate Cut

German industrial production continues to decline. The rate of contraction in March was slightly better than the average forecasts but maintained the downward trend.

April CPI Preview: The Clock Is Ticking for a September Cut

A string of uncomfortably-hot inflation readings in the first quarter leaves a narrow window for inflation to downshift before a late summer rate cut by the Federal Open Market Committee (FOMC) is no longer on the table. We expect the April CPI report to demonstrate that while inflation is not as sticky as the Q1 pace indicated, the journey back to 2% remains slow-going.

When Will BoE Cut?

The BoE is not expected to cut its policy rate today, but the MPC is expected to agree less on when to cut rates. Four MPC members out of nine are sitting in the hawkish camp, Governor Bailey has shifted his stance from ‘it’s too early to talk about cuts’ to ‘the inflation dynamics between the US and UK are diverging’. Some see a small chance that the BoE could cut rates in June meeting, In tandem with the ECB. But a more realistic scenario is an August BoE cut.

Japanese Yen Lower After BoJ Minutes

The Japanese yen has posted a three-day slide and is in negative territory on Thursday. USD/JPY has risen 0.26% on the day and is trading at 155.93 at the time of writing.

Bank of England Closing In On Rate Cuts

The Bank of England (BoE) held its policy rate steady at 5.25% at today's monetary policy announcement, an outcome that was unanimously expected by economists. While the Bank of England did not explicitly signal near-term easing in its accompanying statement, there were several dovish elements that suggest rate cuts are approaching. For now, we maintain our call for an initial 25 bps BoE rate cut in August, while acknowledging that the risk of an earlier June move has increased.

Cliff Notes: Staying the Course

Please complete this form before arriving for your appointment In Australia, the RBA Board left the cash rate unchanged at 4.35%. This decision, following an upside surprise on inflation data and stronger-than-expected labour market data but weaker partials for consumption, highlights the Board’s cautious approach amid volatile data.

Canadian Dollar Quiet Ahead of Jobs Data

The Canadian dollar is almost unchanged on Friday. USD/CAD is up 0.03%, trading at 1.3680 in the European session at the time of writing.

Week Ahead – US Inflation Numbers to Shake Fed Rate Cut Bets

At last week’s meeting, the Fed appeared less hawkish than expected, with Chair Powell ruling out rate hikes and hinting that they are still leaning towards cuts. The softer-than-expected jobs report for April corroborated that view, which was echoed by more policymakers this week.

Weekly Economic & Financial Commentary: The Calm Before the Storm

Was it an unwillingness to share the limelight with the world's central banks or just a quirk of the domestic economic calendar? Either way, it was an extraordinarily light week for U.S. economic data.