This Week’s Central Bank Signals and Trade War Reactions

  • Monday, December 3, 2018

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

Although markets will likely pay closer attention to the meeting between President Trump and President Xi Jinping, G10 currency central banks are still very busy this week, with a total of seven active and two holding policy meetings. Fed policymakers, among the busiest of all central bankers this week, will deliver a flurry of speeches likely to signal a December rate hike followed by a slower pace of tightening thereafter. Across the pond, Bank of England policymakers are likely to sound more dovish as they warn markets about the risks of a “no deal” Brexit.

Both the Bank of Canada and Reserve Bank of Australia are likely to hold rates at their respective policy meetings this week. BOC policymakers will likely sound hawkish and signal rate hikes to come, while RBA policymakers are likely to sound more neutral, or even a bit dovish, as they continue to favor a wait-and-see approach.

The ECB, BOJ and Riksbank are all less likely to move markets this week, though ECB President Draghi may use his speech to signal an upcoming breather for policymakers coinciding with the conclusion of asset purchases. Riksbank policymakers, currently in the unenviable position of having signalled tighter policy just in time for growth to stall, are likely to stay the course this week despite economic pressure. Similarly, the BOJ appears poised to sound neutral in their bond market survey.

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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