Analytics on a Busy Week in Central Banking

  • Tuesday, September 4, 2018

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The Most Important Central Bank Releases This Week
central bank communications analytics research

With eight of the G10 currency central banks issuing communications this week, summer vacation is definitely over. The seven scheduled Fed speakers are likely to sound slightly hawkish in aggregate, thereby confirming that the Fed intends to hike rates later this month. Three ECB policymakers are also speaking, though they are likely to strike a more neutral or perhaps slightly hawkish tone to support their plan of gradually curtailing stimulus.

The BOC, Riksbank, and RBA are all likely to hold rates at their respective policy meetings this week and issue neutral or somewhat hawkish remarks. BOC policymakers may sound particularly hawkish in light of accelerating GDP growth, but a hike remains unlikely due to ongoing trade concerns and soft business spending. The Riksbank is likely to signal that a hike later this year remains their base case, but their rhetoric will need to be increasingly hawkish in order to clarify this signal. RBA policymakers continue to enjoy restrained inflation and solid GDP growth, but they will likely sound neutral this week given ongoing trade concerns coupled with the economic impact of a drought.

As seems to be increasingly common for the BOJ, policymakers have been discordant recently, creating confusion among central bank watchers. Kuroda’s speech this week will likely clarify the bank’s JGB purchase plans while attempting to sound slightly dovish. Meanwhile, stagflationary conditions continue to plague the UK economy, and despite elevated inflationary pressure, the BOE’s Inflation Attitudes Survey released this week will likely score neutral or slightly hawkish. The only SNB policymaker speaking this week is Fritz Zurbrügg, who may address the fact that the CHF has rapidly appreciated since mid-August. His speech will likely sound neutral and maintain its focus on the bank’s stability in managing the CHF despite a balance sheet that now exceeds 120% of Swiss GDP.

This is an abbreviated version of the Cyborg Analyst. The full weekly report contains detailed analysis based on Prattle’s Central Bank Analytics. Subscribe here.

The Prattle Team

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