Bracing for Fed normalization

Dec 14, 2015 02:45 am UTC| Commentary Central Banks

Depending on how the market interprets Fed guidance at the upcoming FOMC on December 15/16, there could be some volatility in USD rates. A Fed hike of 25bps should come as no surprise. The market has already put the...

Currency War Series

Currencies nervous ahead of Fed rate lift-off expected on 16 Dec

Dec 14, 2015 02:39 am UTC| Commentary Central Banks

Currencies are nervous ahead of the first US rate lift-off widely expected on 16 Dec. The weak tone in equities is reflected by the flight to safety into the Japanese yen and the Swiss franc. USD/JPY is below 121.62, the...

Currency War Series

Bank Indonesia rate steady at 7.5%

Dec 14, 2015 02:07 am UTC| Commentary Central Banks

Bank Indonesia (BI) loosened its monetary policy stance by lowering the reserve requirement rate in November. What the central bank will do this week is likely to be dependent on the US Fed rate decision and its potential...

Currency War Series

Don’t underestimate the chance of a further rate cut in Taiwan

Dec 14, 2015 01:57 am UTC| Commentary Central Banks

Taiwans central bank (CBC) is scheduled to review monetary policy this Thursday, immediately after the FOMC meeting. Market opinions are divided regarding whether the CBC will cut rates at a same time when the Fed is about...

Currency War Series

Banxico to lag the Fed

Dec 14, 2015 00:30 am UTC| Commentary Central Banks

An underperformance of MXN is expected, particularly on Thursday, since no change is expected in the fondeo rate, compared with market consensus for a 25bp increase. The path implied in the TIIE curve for the overnight...

Currency War Series

More weakness for the Columbian peso if Banrep holds

Dec 14, 2015 00:10 am UTC| Commentary Central Banks

In Colombia, Banrep is expected to pause its hiking cycle, as the economic outlook for 2016 has deteriorated in recent weeks. OPECs lack of agreement on a production quota is likely to keep oil prices depressed next year,...

RBA likely concerned by relative currency strength

Dec 13, 2015 21:59 pm UTC| Commentary Central Banks

The RBA board minutes are due on Tuesday, and they are expected to show that the board has been encouraged by signs of stronger activity, as well as more evidence that the latest round of macroprudential measures is...