The tradition of central banks hosting meetings just before Christmas continued this year with policy decisions in the US, Japan, UK, Norway, and Sweden. The largest present came from the US Federal Reserve in the shape of a significant hawkish surprise. Fed cut the policy rate target by 25bp to 4.25-4.50% as expected, but Powell delivered […]

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In focus today In the euro area, we get data on consumer confidence for December. Consumer confidence has been on a rising trend the past two years but in November it unexpectedly declined. It will be very import for the growth outlook to see if the decline was just a blip or it continued in […]

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Key insights from the week that was. As is tradition in Australia, the Federal Government delivered its mid-year economic and fiscal outlook in the lead up to Christmas. As anticipated, this update highlighted a troubling combination of fading revenue windfalls and persistent strength in spending across critical services, infrastructure, cost-of-living measures and state/local grants. While […]

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At today’s monetary policy meeting the BoE kept the Bank Rate unchanged at 4.75%, which was widely expected. The BoE delivered a dovish vote split but continues to emphasise a gradual approach to reducing the restrictiveness of monetary policy. We think this supports our base case of the next cut coming in February and a […]

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Markets Yesterday’s hawkish FOMC cut still resonated today. The front end of the curve outperformed slightly after US money markets even outhawked the Fed, looking to only 1 instead 2 rate cuts next year. The US 2-yr yield returns 4.5 bps of yesterday’s 15 bps gain. Long-end US bond yields remain upwardly oriented with the […]

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Both Sterling and Japanese yen are among the weakest-performing currencies today, following their respective central banks meetings. BoE left rates unchanged at 4.75%, but the surprise came from a dovish shift in the MPC, with three members voting for a cut. While BoE reiterated that a “gradual approach” to easing remains appropriate, rising concerns over […]

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BoE held its Bank Rate steady at 4.75%, in line with expectations, but the vote leaned more dovish than before. Three MPC members—Swati Dhingra, Dave Ramsden, and Alan Taylor—voted for a rate cut. BoE reaffirmed that a “gradual approach to removing monetary policy restraint remains appropriate” and emphasized the need to maintain restrictive policy “for […]

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Monetary Policy Summary, December 2024 The Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. The MPC adopts a medium-term and forward-looking approach to determine the monetary stance required to achieve the inflation target sustainably. At its meeting ending on […]

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In focus today A packed European central bank day kicks off with the Riksbank decision at 9:30 CET. We expect a 25bp cut to 2.50% and that the central bank will maintain a message of more cuts at the beginning of 2025. Following the November decision to cut by 50bp to 2.75%, the communication has […]

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Sometimes, the truth is hard to say—and even harder to hear. The Federal Reserve (Fed) announced another 25bp cut as widely expected and priced in, but hinted that there will be just about two rate cuts throughout next year. The GDP forecasts for this year and the next were revised higher, the unemployment rate lower, […]

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British pound is showing little movement on Wednesday. Early in the North American session, GBP/USD is trading at 1.2679, down 0.07% on the day. UK inflation climbs to 2.6% Inflation in the UK climbed to 2.6% in November, its highest level since March. The rise was driven by higher costs for petrol and food as […]

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The forex and stock markets are holding steady today, with limited volatility as traders anticipate FOMC rate decision and updated economic projections. A 25bps rate cut, reducing the target range to 4.25–4.50%, is virtually certain. However, the market’s focus lies on the tone and guidance Fed delivers. Critical questions include whether a pause in easing […]

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Canada joined the global political gloom. The sudden resignation of the finance minister on Monday started raising questions about Trudeau’s leadership as politicians there try to find ways to deal with economic slowdown topped by Trump’s tariff threats. Happily for the Bank of Canada (BoC), inflation dropped below the 2% target for the second time […]

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Markets Relative market calm this morning was already disturbed sooner than expected by the publication of the UK labour market data. The unemployment rate remained unchanged at 4.3% and November payrolls declined a bigger than expected 35k. However, it was wage growth data catching the eye just two days before the final BoE policy meeting […]

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The British pound is showing little movement on Tuesday, after jumping 0.57% a day earlier. In the European session, GBP/USD is trading at 1.2698, up 0.13% on the day. UK wage growth higher than expected UK wage growth excluding bonuses climbed 5.2% y/y in the three months to October, up from an upwardly revised 4.4% […]

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Sterling remains resilient, as supported by UK employment data indicating that wages remain robust. This development aligns with improved conditions in the UK’s services sector, as seen in yesterday’s PMI release, and suggests that underlying price pressures have not diminished despite growing pessimism tied to the Autumn Budget’s uncertainty. Markets maintain near-zero expectations for a […]

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We expect the Bank of England (BoE) to keep the Bank Rate unchanged at 4.75% on Thursday 19 December in line with consensus and market pricing. Data has broadly been in line with the BoE’s expectations, warranting a continued signalling of only a gradual approach to monetary policy easing. We expect the reaction in EUR/GBP […]

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The British pound has moved higher on Monday, after declining 1% last week. In the European session, GBP/USD is trading at 1.2747, up 0.30% on the day. UK Services improves, manufacturing slips The UK Services PMI rose to 51.4 in December, up from 50.8 in November, which was a 13-month low. This beat the market […]

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The forex market began the week on a subdued note, with mild risk-off sentiment setting the tone. China’s latest economic data painted a bleak picture, with retail sales significantly underperforming expectations and fixed asset investment experiencing a deeper decline. While industrial production growth met forecasts, it failed to offset concerns about the broader economic slowdown. […]

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Summary United States: Sticky Inflation, Sticky Wicket for the Fed Price data this week showed that inflation remains stubbornly above the FOMC’s target. Overall inflation has trended sideways in recent months, and while we do not expect this week’s data to prevent the Fed from cutting another 25 bps next week, it will likely contribute […]

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