by David Hill | Jul 11, 2019 | European Economy
At a time when market expectations of G10 monetary policy are rapidly shifting in the direction of fresh policy easing, Norway is a clear outlier. The Norges Bank hiked the deposit rate by 25bps last week and has alluded to the possibility of further hikes going...
by David Hill | Jul 8, 2019 | European Economy
The apparent de-anchoring of market-based inflation expectations has started to rattle the ECB and has raised the spectre of a return to monetary easing, mirroring the abrupt shift in marketimplied policy rate expectations in the US where 65 bps of cuts are now...
by David Hill | May 3, 2019 | US Economy
This post was taken from our April 16th Weekly. The market is currently pricing in a 65% probability of a 25bp policy rate cut in the US over the next 12 months. However, the Fed may have to throw caution to the wind late this year or early next year as inflationary...
by David Hill | Apr 18, 2019 | European Economy
Having appeared to have passed the worst of the economic crisis, Turkey has faced a fresh bout of turbulence in recent weeks. We have revisited our framework for identifying buying opportunities following an EM crisis to gauge Turkey’s position on the recovery path....
by David Hill | Apr 5, 2019 | European Economy
The ECB’s latest announced form of stimulus is a third round of TLTRO issuance. Previous tranches of TLTROs have been 4-year loans primarily made to European banks that are active in lending to the private sector. The rate paid on the loans is reduced as more of the...
by David Hill | Dec 14, 2018 | European Economy, Monetary Policy
Market-based measures of euro area inflation expectations have shifted lower, which could point to a delay in monetary policy normalisation. The first chart below shows the EUR 5Y5Y forward inflation swap, which has dropped sharply in recent weeks. A few years ago,...
by David Hill | Jan 26, 2018 | Monetary Policy
Central banks are increasingly altering the perception of their reaction functions to allow tighter (or less easy) monetary policy. At the ECB, discussion of so-called “supercore” inflation has re-emerged. This consists of the components of the HICP basket that have a...
