26 Jan 2015
Week ahead dominated by Central Bank decisions - TDS
FXStreet (Barcelona) - The TD Securities Team note that this week is a busy week for central bank rate decisions and in all cases their expectation and the clear market consensus is for rates to be kept on hold.
Key Quotes
“Markets will look to the Fed for any signs that the central bank will stray from their expected path of normalizing rates later this year. The absence of a post-meeting press conference and updated economic projections will leave markets with only a communiqué to discern any noticeable change in stance, though we do not expect a strong shift in the Fed’s message.”
“In New Zealand, we expect the RBNZ to drop their hiking bias this week and move to a neutral stance while in EM we expect all the central bank decisions this week to be left on hold”
“On Tuesday, the National Bank of Hungary is expected to keep its policy rate on hold at 2.1%, but the accompanying press statement will be examined to see if the possibility of rate cuts has increased as deflation has deepened.”
“On Wednesday, the Central Bank of Malaysia is expected to keep its policy rate on hold at 3.25%.”
“On Thursday, in South Africa, the unanimous consensus is for the SARB to keep its key rate at 5.75%, but will the press statement still maintain that they are in a tightening cycle? Also on Thursday Banxico is expected to keep the overnight rate at 3.0%.”
“On Friday, we expect the Central Bank of Colombia (BanRep) to keep the policy rate unchanged at 4.5%. While headline inflation finished 2014 at 3.66%, above the Bank’s 3% target, the prospects of slowing growth, largely on the back of lower oil prices and oil production, have led BanRep to adopt a neutral tone thus far.”
“Also on Friday, we expect the Central Bank of Russia to keep the key rate on hold. With inflation continuing to move up and the stability of the ruble by no means certain, the CBR cannot afford to take any risks by cutting rates”
Key Quotes
“Markets will look to the Fed for any signs that the central bank will stray from their expected path of normalizing rates later this year. The absence of a post-meeting press conference and updated economic projections will leave markets with only a communiqué to discern any noticeable change in stance, though we do not expect a strong shift in the Fed’s message.”
“In New Zealand, we expect the RBNZ to drop their hiking bias this week and move to a neutral stance while in EM we expect all the central bank decisions this week to be left on hold”
“On Tuesday, the National Bank of Hungary is expected to keep its policy rate on hold at 2.1%, but the accompanying press statement will be examined to see if the possibility of rate cuts has increased as deflation has deepened.”
“On Wednesday, the Central Bank of Malaysia is expected to keep its policy rate on hold at 3.25%.”
“On Thursday, in South Africa, the unanimous consensus is for the SARB to keep its key rate at 5.75%, but will the press statement still maintain that they are in a tightening cycle? Also on Thursday Banxico is expected to keep the overnight rate at 3.0%.”
“On Friday, we expect the Central Bank of Colombia (BanRep) to keep the policy rate unchanged at 4.5%. While headline inflation finished 2014 at 3.66%, above the Bank’s 3% target, the prospects of slowing growth, largely on the back of lower oil prices and oil production, have led BanRep to adopt a neutral tone thus far.”
“Also on Friday, we expect the Central Bank of Russia to keep the key rate on hold. With inflation continuing to move up and the stability of the ruble by no means certain, the CBR cannot afford to take any risks by cutting rates”