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Fed to keep interest rate on hold, with Powell likely to reiterate that case for a rate cut has diminished

29 April 2024

Chris Scicluna; Emily Nicol
  • The Fed will leave the FFR target range unchanged at 5.25-5.50%, while Fed Chair Powell is likely to reiterate at his press conference that the case for a rate cut has diminished; in terms of the Fed balance sheet, the FOMC might be ready to agree to slow the pace of QT
  • Data-wise in the US, key releases include the Q1 employment cost index, April labour market report and the manufacturing and services ISMs 
  • Flash estimates of euro area inflation in April and GDP in Q1 are the European highlights

BoJ to leave policy unchanged

22 April 2024

Chris Scicluna; Emily Nicol
  • The BoJ's Policy Board is highly unlikely to change policy. But with the yen uncomfortably weak for Japan’s authorities, Ueda is likely to repeat that the BoJ is prepared to tighten policy sooner rather than later if necessary to counter the cost-push impact of the exchange rate. And the BoJ’s updated economic forecasts are likely to see the near-term inflation outlook slightly revised higher

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European and Japanese inflation in focus

15 April 2024

Chris Scicluna; Emily Nicol
  • In the euro area, final March inflation estimates are likely to confirm that the headline rate matched November’s 28-month low, while core inflation declined to a two-year low
  • The UK’s dataflow will provide an important update on the key variables in the MPC’s reaction function, including the latest labour market report  and inflation figures 
  • Japanese inflation is expected to confirm that headline and core inflation remained firmly above the BoJ's 2% target.

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BoJ's Summary of Opinions to be published

25 March 2024

Emily Nicol
, 
Chris Scicluna
  • In the euro area, the European Commission’s economic sentiment survey is likely to signal ongoing modest recovery momentum.
  • March inflation estimates from France, Italy and Spain might well be exaggerated by the relatively early timing of Easter this year, as well as base effects associated with the ongoing gradual withdrawal of energy support measures.
  • In the US, the highlight will be February personal income and spending figures, along with the closely-watched PCE deflators.

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BoJ stocktake: As expected, a relatively dovish tightening

19 March 2024

Chris Scicluna
  • The BoJ ended the negaitive interest rate policy, the YCC framework and formally stop purchases of ETFs and J-REITs. 
  • But the BoJ will maintain JGB purchases around the current pace, while Ueda suggested that policy would remain accommodative. 

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