BANK VIEWS: BAML (Meyer, Cabana): They look for the FOMC to cut rates by 25bp to a range of 1.75-2.00. The case for a cut has increased since the July meeting as the data flow in the US has softened and uncertainty remains in the outlook. Expect the policy statement to continue to signal optionality toward additional cuts contingent on the data flow and the evolving outlook. They expect Chair Powell will reinforce the policy […] Read More
VOLATILITY GUARANTEED AS NORGES DECISION TOO CLOSE TO CALL:: A market split down the middle makes a neutral decision from the Norges Bank close to impossible. While domestic data (inflation, labour market and the much-vaunted Regional Network Survey) remains strong, the executive board have named both Brexit and the trade war as downside risks. Nonetheless, NOK remains weak on a trade weighted and REER basis, giving the board room to tighten policy and control financial […] Read More
SNB TO BOW TO EUROZONE PRESSURE SNB TO BOW TO EUROZONE PRESSURE Given the narrowing in the policy differential between the SNB and ECB since last week, pressure is building on the board to restore the buffer between Swiss and Eurozone rates. However, the SNB may face logistical and political resistance to lower rates, including the ramifications for the domestic banking system and the scrutiny of the US Treasury. As such, the SNB will likely […] Read More
-BAML: expect a 20bp cut to Depo rate, introduction of tiering, extension in forward guidance and relaunch of QE at €30bn p/m for 9 to 12 months. Also possible TLTRO terms could be improved. -Barclays: expect a rate cut and relaunch of QE, esp. since Draghi will do whatever it takes to deliver a bold package before stepping down at the end of Oct. -BNP: expect a 10bp Depo cut, keeping some powder dry in […] Read More
03-Sep-2019 14:35:00 – ECB POLICYMAKERS LEANING TOWARD RATE CUT, TIERING, REINFORCED GUIDANCE IN SEPT 12 STIMULUS PACKAGE – FIVE SOURCES 03-Sep-2019 14:35:00 – MANY ALSO SUPPORT QE, BUT OPPOSITION FROM SOME NORTHERN STATES COMPLICATES DISCUSSION – SOURCES 03-Sep-2019 14:35:00 – ECB HAS ROOM FOR ABOUT 1 YEAR OF QE USING FLEXIBILITY UNDER EXISTING RULES, NO IMMEDIATE NEED TO CHANGE ISSUER LIMIT – SOURCES 03-Sep-2019 14:35:00 – ANY ECB RATE CUT IS LIKELY TO BE ACCOMPANIED […] Read More
The comments from the ISM: The August PMI indicates that US manufacturers are enduring a torrid summer, with the main survey gauge down to its lowest since the depths of the financial crisis in 2009. OUTPUT and order book indices are both among the lowest seen for a decade, indicating that manufacturing is likely to have again acted as a significant drag on the economy in the third quarter, dampening GDP growth. At current levels, […] Read More
– 03 Sep: Commons returns from summer recess. Earliest opportunity for tabling of motion of no confidence in the gov’t. – 04 Sep: Earliest date a vote of no confidence (VoNC) could be held. – 12 Sep: Commons set to rise for party conference recess. – 12-17 Sep: Liberal Democrat party conference-Bournemouth. – 18 Sep: If VoNC succeeds on 04 Sep, Commons must pass motion of confidence in gov’t by this date or general election […] Read More
Bberg article out yesty evening “For the first time since President Trump was elected, more Americans say the economy is getting worse than getting better. A new Quinnipiac Poll shows 37% saying the economy is declining, compared with 31% who continue to see improvement. Only 30% say the economy is staying about the same, the lowest number on record. Polls have consistently shown the economy to be Trump’s strongest suit, but the Quinnipiac poll could be a turning […] Read More
(BN) ECB’s Knot Says Economy Doesn’t Yet Warrant Resumption of QE ——————————————————————————-This message may contain confidential or privileged information. If you are notthe intended recipient, please advise us immediately and delete this message.The unauthorised use, disclosure, distribution and/or copying of this e-mail orany information it contains is prohibited.This information is not, and should not be construed as, a recommendation,solicitation or offer to buy or sell any securities or related financialproducts. This information does not constitute investment advice, does notconstitute a personal recommendation and has been prepared without regard tothe individual financial circumstances, needs or objectives of persons whoreceive it. ECB’s Knot Says Economy Doesn’t Yet Warrant Resumption of QE2019-08-29 14:37:31.220 GMT By Piotr Skolimowski and Ruben Munsterman (Bloomberg) — European Central Bank policy maker KlaasKnot said the euro-area economy isn’t weak enough to warrant theresumption of bond purchases and such a step shouldn’t be takenunless the slowdown worsens. While the Dutch central-bank governor said he’s open to aninterest-rate cut, his remarks echo […] Read More
CITI – Month-end changes most supportive for Germany EMU Government Bond Index (EGBI) We expect the EGBI to remain unchanged at the end of August. This is lower than the average end-August changes over the past four years. Weighted duration changes most supportive for Germany Month-end changes should be most supportive for Germany, followed by France and Spain. The extension in the German and French indices is driven by an increase in […] Read More
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