Fed Hike Aftermath Series

US Fed unlikely to hike rates next week, but high probability of hike in April or June

Mar 11, 2016 12:39 pm UTC| Commentary Central Banks

Since FOMCs January meeting, financial conditions have noticeably eased. The committee had become more dovish in January, erasing around half of the tightening that came after the first hike in December. However, according...

Currency War Series

Bank of Mexico to follow US Fed’s policy strategy, to keep rates on hold next week

Mar 11, 2016 12:13 pm UTC| Commentary Central Banks

The Bank of Mexico is expected to follow the US Feds move and keep the overnight rate on hold at 3.75% next week. It is likely to issue a relatively dovish statement in terms of growth but slightly more hawkish in terms of...

Euro strength inconsistent with the comprehensive ECB package, an overreaction, downside to resume

Mar 11, 2016 12:09 pm UTC| Commentary Central Banks

The ECB fired its bazooka yesterday, and undoubtedly a powerful one, yet markets were unimpressed. As expected, the ECB cut its deposit rate by 10 basis points, further into negative territory to -0.4%. The marginal...

Currency War Series

South African Reserve Bank likely to proceed with rate hike cycle in 2016

Mar 11, 2016 11:25 am UTC| Commentary Central Banks

The South African Reserve Bank is expected to hike its key rate to 7% as the high CPI inflation outlook continues to pressurize the central bank to go ahead with its rate hike cycle. According to the MPC, the South African...

Danish central bank to follow normal reaction function, narrowing EUR-DKK monetary policy rate spread

Mar 11, 2016 09:42 am UTC| Commentary Central Banks

The Danmarks Nationalbank yesterday stated that it kept the interest rates on hold. Hence, the interest rate on certificates of deposit is kept unchanged at -0.65% and the EUR-DKK monetary policy rate spread is narrowed to...

ECB did surprise market but market surprised more

Mar 11, 2016 07:59 am UTC| Commentary Central Banks

It would be fair to say that European Central Bank (ECB) succeeded in surprising the market, with big stimulus package it delivered, so the immediate effect was as intended. Bond yields were dropping, Euro was going down,...

ECB over-delivery fails to impress

Mar 11, 2016 01:55 am UTC| Commentary Central Banks

ECB fired a bazooka yesterday by more-than-expected across-the-board easing, though the markets were not impressed. Instead, the stock markets faltered and the EUR/USD ended higher than before the stimulus was announced....