Forecasting a Busy Week in Monetary Policy

  • Monday, September 18, 2017

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The Most Important Central Bank Releases This Week

With three policy meetings, two sets of minutes, and dozens of speeches, this is a very busy week in G10 monetary policy. The highlight of the week is likely to be the Fed meeting on Wednesday, which is expected to include an announcement about balance sheet unwinding. This move comes despite persistently neutral or slightly dovish sentiment. Nevertheless, the Fed appears to be making good on the policy path they set earlier in the year when they hiked rates twice and indicated balance sheet unwinding would happen this fall. This move comes as the Fed may look to delay its next rate hike into 2018.

The other policy meetings this week promise to be a bit more staid as the BOJ will likely hold rates and issue a neutral or slightly hawkish statement, and the Norges Bank will likely hold rates and issue a neutral or slightly dovish statement. RBA minutes will likely strike a somewhat hawkish tone, even if it is tamped down by Lowe’s more neutral remarks. Despite improving economic conditions, the Riksbank minutes are likely to be slightly dovish as policymakers continue to cling to stimulus.

ECB policymakers are slated to be the most active speakers this week, perhaps suggesting that they are beginning a coordinated campaign to begin explaining tapering plans. Conversely, BOC speakers are likely to remain quiet and avoid addressing recent criticism about opaque communications leading up to the last rate hike. The SNB will also issue a policy bulletin that could shed light on its new, softer language about currency market intervention suggesting that Swiss policymakers may no longer see intervention as necessary to depress the value of the CHF.

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

The Prattle Team

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