Analyzing Dovish Signals from Global Central Banks

  • Monday, July 8, 2019

Welcome to “The Cyborg Analyst” by Prattle. This report provides weekly, quantitative insights on G-10 currency central banks.

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

Seemingly making up for last week’s lull surrounding Independence Day in the US, seven of the G10 currency central banks are active this week. The biggest market mover is likely to be the Federal Reserve, where Chairman Powell will testify before Congress within hours of the Fed releasing the minutes from the June FOMC meeting. In addition to the testimony and minutes, several other Fed policymakers will speak to audiences of market participants eager to know whether a July rate cut remains probable given the strong June employment figures. North of the border, the Bank of Canada could also move markets by holding this week’s lone policy meeting. Policymakers there appear poised to hold rates and signal readiness to engage in stimulus. 

Across the pond, BOE policymakers will likely attempt to maintain a neutral tone, even as the financial stability report identifies cracks in the economy that could become fissures in the event of a hard Brexit. On the other side of the channel, ECB policymakers now have clarity about their next president. This week’s lone ECB speaker will be Benoit Coeure, who is likely to maintain the bank’s dovish tone. In Sweden, this week’s minutes release is likely to reveal that Riksbank policymakers desire to hike rates but will likely be prevented from doing so by the reality of weaker-than-anticipated economic conditions.

In APAC, the BOJ’s Regional Economic Report is likely to indicate ongoing struggles in the Japanese economy. Meanwhile, this week’s lone speaker from the RBA, Guy Debelle, is likely to echo the ongoing dovish narrative that drove policymakers to cut rates to record lows at the bank’s last meeting. In sum, global central banks are moving in near unison toward a more dovish posture, with certain banks acting on that sentiment while others continue to simply chatter, for the time being.

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