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Powell back in the spotlight

Chris Scicluna
Emily Nicol
  • Ahead of the FOMC announcement and another special NY Fed repo operation, stock markets in the Asia-Pacific posted a mix of gains and losses, partly responding to the lower oil price. Meanwhile, Japan’s latest economic data pointed to ongoing weakness in external demand  albeit a likely positive contribution to GDP growth from net trade in Q3, while euro area car registration figures were particularly weak.

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Oil and the Fed to dominate the week ahead

Chris Scicluna
Emily Nicol
  • Oil prices have inevitably spiked this morning in response to the weekend attack on Saudi oil facilities, adding a new source of uncertainty for bond markets after last week’s major sell-off. While the Fed seems bound to cut rates this week, its commentary and dot plots will be under scrutiny and the BoJ might tweak its policy guidance too.

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ECB announcements continue to reverberate

Chris Scicluna
  • Euro area  govvies remain volatile after yesterday’s ECB announcements prompted a major curve-flattening, while JGBs shifted significantly in Asian time as speculation persisted ahead of next week’s BoJ policy meeting.

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Will Draghi go out with a bang or a whimper?

Chris Scicluna
Emily Nicol
  • After a big mixed bag of Japanese data overnight followed Trump’s latest trade-war tweet, the ECB’s lunchtime announcement of its long-awaited policy stimulus package – to represent Draghi’s final throw of the dice – will have a major market impact. Key variables include the size of rate cut to be delivered, the design of any tiering framework that might be introduced, and the magnitude of any new QE programme.

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Boost to Japanese sentiment likely to be short-lived

Emily Nicol
Chris Scicluna
  • While a Japanese business survey suggested that firms were somewhat more upbeat about current conditions, they were predictably more uneasy about the outlook for Q4 when domestic demand will be hit by the higher consumption tax hike.

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