image

Central banks step up pace of their great stimulus retreat

Here’s a look at where policymakers stand on the path out of pandemic-era stimulus, in order of how hawkish they appear:

1/ NORWAY

Norway’s central bank cemented its position as the most aggressive rate-setter in the developed world, raising rates https://www.reuters.com/markets/europe/norway-hikes-interest-rates-with-more-come-2021-12-16 for the second time this year on Dec. 16 despite an expansion of COVID curbs that could hurt economic prospects.

Having kicked off policy tightening in September, the bank upped rates by 25 basis points to 0.5% and flagged more next year, potentially taking the key rate to 1.25% by end-2022.

2/ NEW ZEALAND

New Zealand’s central bank hiked rates last month for the second time this year to 0.75% and forecast they would reach 2.5% by 2023.

Inflation has surged and a red-hot housing market has stoked fears of economic overheating.

Data this week showing the economy shrank a record 3.7% https://www.reuters.com/world/asia-pacific/new-zealand-gdp-shrinks-37-q3-due-delta-lockdowns-2021-12-15 in Q3 was not as bad as expected and with COVID-19 restrictions expected to ease, the numbers have not dampened rate hike expectations.

3/ BRITAIN

The Bank of England shocked markets https://www.msn.com/en-ca/money/topstories/boe-becomes-first-major-central-bank-to-raise-rates-since-pandemic/ar-AARRc2R on Thursday with a 8-1 vote to hike rates, deciding to stamp on inflation now, rather than wait to see how the fast-spreading Omicron variant of COVID-19 impacts the economy.

Explaining its 15 bps hike to 0.25%, the BoE said inflation was likely to hit 6% in April – triple its target – and that more rate rises would probably be needed.

Money markets, which had priced in an initial hike in February, now expect 25 bps more of tightening by March and a further two rate rises before end-2022.

4/ UNITED STATES

The Federal Reserve this week took a significant hawkish turn https://www.reuters.com/markets/us/fed-prepares-stiffen-inflation-response-post-transitory-world-2021-12-15.

On Wednesday, it committed to end its pandemic bond-buying by March and laid out an accelerated timetable for rate hikes.

Fed Chair Jerome Powell anticipates strong growth and full employment in 2022 and believes the central bank needs to treat inflation as the more pressing risk.

No surprise, then, that markets price in a strong chance of rates rising in May, with a hike by June fully priced in.

5/ CANADA

Comments by Bank of Canada governor https://www.reuters.com/markets/us/bank-canada-says-likely-cut-rates-effective-lower-bound-more-often-2021-12-15 Tiff Macklem this week suggest rates will start rising soon, given inflation at 18-year highs and fast-diminishing economic slack.

Money markets now almost fully price in a 25 bps rate rise in March. Canada’s central bank said in October it would end its bond-buying programme and brought forward its projections for rate rises.

6/ AUSTRALIA

Australia’s central bank is in the dovish camp, but only just.

Last month the Reserve Bank of Australia took a major step towards unwinding pandemic stimulus when it abandoned an ultra-low bond yield target and opened the door for a first rate hike in 2023, earlier than a previous forecast of 2024.

This week Governor Philip Lowe said he was open to ending bond buying as early as February but still thought it unlikely rates would need to rise in 2022 – putting the RBA towards the back of the tightening queue.

7/ SWEDEN

Sweden has ended pandemic-era lending facilities but says rates will rise only if inflation pressures change significantly. The bank has pencilled in a rate hike in late 2024.

But data this week showed headline inflation at a 25-year high https://www.reuters.com/markets/europe/headline-inflation-sweden-hits-fastest-pace-since-1993-2021-12-14, which one rate-setter said supported the case to further taper stimulus. Riksbank governor Stefan Ingves https://www.reuters.com/markets/europe/swedish-cbank-chief-says-inflation-surge-due-energy-prices-2021-12-14 attributed the surge to power prices.

8/ EURO ZONE

The European Central Bank is on a very different path to most of its peers.

On Thursday it said it would end its 1.85 trillion euro pandemic emergency asset-buying scheme next March.

But it also promised copious support via its long-running Asset Purchase Programme and signalled that any exit from years of ultra-easy policy will be slow. The ECB says a rate rise next year is unlikely and expects inflation, running at a record-high 4.9%, to retreat.

9/ JAPAN

The Bank of Japan on Friday took tentative steps to unwind pandemic-era stimulus, saying it will slow purchases of corporate bonds and commercial paper to pre-pandemic levels from April.

But the bank maintained its short-term rate target at -0.1% and that for 10-year bond yields around 0%. With inflation well below its 2% target, the BOJ will likely maintain ultra-easy policies much longer than peers.

10/ SWITZERLAND

The Swiss National Bank stuck to its guns this week, saying its monetary policy stance, combining the world’s lowest interest rates with frequent currency market interventions, remained appropriate.

While the Swiss franc’s recent rise to 6-1/2-year highs has taken the edge off imported inflation, the SNB has intervened sporadically to keep the franc’s gains in check. It recently launched its single biggest weekly intervention since mid-May.

(Reporting by Tommy Wilkes, Saikat Chatterjee, Sujata Rao and Dhara Ranasinghe; Editing by Catherine Evans)


Source link

0 0 votes
Article Rating

S’abonner
Notifier de
0 Commentaires
Commentaires en ligne
Afficher tous les commentaires
Reset Password

Avertissement sur les risques :

Le trading peut vous exposer à des risques de pertes supérieures aux dépôts et ne convient qu’à une clientèle avisée ayant les moyens financiers de supporter un tel risque. Les CFD sont des instruments complexes et présentent un risque élevé de perte rapide en capital en raison de l’effet de levier. Entre 74 et 89% des comptes de clients de détail perdent de l’argent lors de la négociation de CFD. Vous devez vous assurer que vous comprenez comment les CFD fonctionnent et que vous pouvez vous permettre de prendre le risque élevé de perdre votre argent. Ce site n’est en aucun cas une offre de conseil en investissement ni une incitation quelconque à acheter ou vendre des instruments financiers. Trader le Forex et/ou les CFD’s implique un niveau de risque élevé, et peut ne pas être approprié car vous pouvez subir des pertes supérieures à votre dépôt. L’effet de levier peut être en votre défaveur.

Vous devez être conscient et avoir une compréhension complète de tous les risques associés au marché et au trading. Le site Union-trader.com peut être amené à produire des commentaires d’ordre général, ce qui ne constitue pas des conseils en investissement et ne doit pas être interprété comme tel.

Veuillez recourir aux conseils d’un conseiller financier extérieur. Le site Union-trader.com décline toute responsabilité pour les erreurs, inexactitudes ou omissions et ne garantit pas l’exactitude ou le caractère complet des informations, textes, graphiques, liens ou autres éléments contenus dans cette documentation. Toute information et toute mise à disposition sur le site ont un caractère privé.