Fed Delivered the Hawkish 50bp Hike, Now it is the ECB's Turn

Market movers today Market focus reverts to the ECB meeting today. The stabilization in euro area core inflation in November, paired with the weakening growth outlook probably gives ECB enough arguments to slow the hiking pace to 50bp (broadly in line with market pricing). However, we expect it to continue guiding for further rate hikes […]

Up Next: The ECB and Bank of England

Markets The Fed lifted policy rates by 50 bps to 4.25-4.50% at its final policy meeting of the year yesterday. The slowdown from the previous 4×75 bps was telegraphed well in advance. December’s statement was an exact copy of the November one and stated that ongoing increases in the policy rate will be appropriate. The […]

More Shocks Coming?

Equity markets are back in the red on Thursday as investors reel from the nasty shock delivered by the Fed and look ahead to the plethora of central bank rate decisions on the agenda today. Safe to say, investors simply didn’t see that coming. Two months of better-than-expected inflation data were enough to convince them […]

Sunset Market Commentary

Markets The ECB raised its key policy rates by 50 bps, bringing the deposit rate at 2%. The central bank sticks to its hawkish guidance saying that they aim to significantly raise them further at a steady pace based on the substantial upward revision to the inflation outlook. During the Q&A session, ECB Lagarde said […]

Bank of England Review

In line with our expectation, the BoE today hiked policy rates by 50bp, bringing the Bank Rate to 3.50%. We expect the increasingly weak growth outlook to support a near-term ending to the hiking cycle. We maintain our call for a 25bp hike in February with risks to our call skewed towards additional hikes in […]

Swiss National Bank Raises Rate Slower than Others

The Swiss National Bank raised its rate by 50 points to 1.0% after two hikes of 50 and 75 points at the previous two meetings. In an accompanying commentary, the NBS said it was countering rising inflationary pressures. In the commentary, the central bank says that “further rate hikes are not ruled out”. This is […]

Here A Hike, There A Hike, Everywhere a Rate Hike

Summary The European Central Bank (ECB) delivered a 50 basis point hike, taking its Deposit Rate to 2.00% at today’s monetary policy meeting, while also announcing plans to begin quantitative tightening from March. The ECB’s accompanying commentary and press conference were also hawkish in tone. The ECB forecasts above target inflation over the medium term, […]

ECB Review

At today’s ECB meeting, the ECB delivered a 50bp rate hike in all three policy rates as widely anticipated, so now the ECB deposit rate is at 2%. The ECB also announced that the end to full APP reinvestments would start in March 2023, which was more specific than the presentation of key principles expected. […]

Cliff Notes: Markets End the Year Mired in Uncertainty

Key insights from the week that was. This week, we received updates on consumer and business confidence and the labour market for Australia. Offshore, a string of 50bp rate hikes were seen across the US, Europe and the UK. The December Westpac-MI survey reported a welcome 3% lift in consumer sentiment; although at 80, confidence […]

BoJ Could Keep Policy and Guidance Untouched

The Bank of Japan has remained an outlier compared to the other major central banks which have been raising interest rates at a fast pace throughout 2022 in a synchronized attempt to bring inflation to heel. This resulted in a tumbling yen and forced Japanese authorities to intervene in the currency market in September and […]