One thing we can be certain about is that the recent trend towards easier monetary policy in both developed and emerging markets has much further to run in 2012. On Thursday, December 8, the European Central Bank cut rates by 25bps for the second time in as many months, and we expect that continued macroeconomic… [Read more]
Although equities sold off in the wake of US Fed Chairman Ben Bernanke’s comments to the International Monetary Conference in Atlanta, my colleagues and I see little evidence of any change to the Fed’s overall outlook. Bernanke reiterated the FOMC’s expectations that higher headline inflation would prove a transient phenomenon; that the labour market was… [Read more]
There are big question marks over the current policy advocated by the Turkish central bank, which despite stellar economic growth chose to cut interest rates to stem the flow of ‘hot money’. With consumer credit growing at over 40% y-o-y in late May, and inflation beginning to rear its head, we ask Chris Graham, Europe… [Read more]
China’s February 8 interest rate hike was in line with a broader theme of monetary tightening in emerging markets over the course of 2011, and is a dynamic which brings both risks and opportunities across assets classes. The People’s Bank of China’s decision to raise the one-year lending rate by 25 basis points (bps) to… [Read more]
The decision by the Banco Central do Brasil (BCB) to hike the benchmark Selic rate by 50 basis points (bps) to 11.25% at its January meeting alters my 2011 interest rate forecasts but does not shift my outlook for monetary policy, namely that Brazil’s monetary authorities will continue to view rate hikes as something of… [Read more]
On this week’s Business Monitor Podcast, Head of Country Risk & Financial Markets Justin Patrie discusses the 2011 macro-market outlook with Global Economic Strategist Tim Cooper. Key issues explored include global equity and FX strategy, developed vs. emerging market performance, the inflation and interest rate outlook and key risks to the ongoing macroeconomic recovery.
Shanghai interbank rates spiked by 300 basis points between Tuesday 18 January and Friday 21 January, with the 1-month rate hitting 7.48%. This is attributed to higher bank reserve requirement ratios, leaving banks short of cash just ahead of the Chinese New Year. BMI believes that the Chinese monetary authorities will correct the problem, but… [Read more]
