Deciphering Central Bank Chatter, ECB Tapering Signals

  • Monday, November 26, 2018

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

Although seven of the G10 currency central banks are active this week, none have policy meetings, and the Fed is the only bank releasing meeting minutes. The Fed minutes are likely to sound somewhat hawkish, further supporting the case for a December rate hike. Fed policymaker speeches by Powell and Clarida are likely to echo this sentiment, though they could sound a bit more dovish about any plans beyond the December hike. Over in Europe, ECB policymakers—extremely active this week with nine scheduled speeches—are likely to remain slightly hawkish despite soft data. BOE policymakers are likely to be somewhat less optimistic, as the financial stability report could denote underlying weakness as a result of ongoing Brexit uncertainty.

Down under, RBA policymakers have made an effort to sound more optimistic recently, but a lack of wage growth has caused them to remain fairly neutral. In Norway, transient inflation due to higher oil prices had driven Norges Bank policymakers toward a hawkish stance, but currently falling oil prices and lower inflation have policymakers now sounding more neutral. In neighboring Sweden, soft inflation data may delay Riksbank policymakers from further signalling the impending rate hike they had previously indicated could happen before year-end. This week’s speech by Flodén could confirm that timeline. Finally, although the SNB has shifted to a somewhat more hawkish stance in recent months, this week’s speech by Jordan could sound more neutral, as the EUR and GBP continue to underperform relative to the CHF.

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.

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