skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

IFI_Monthly_Interest_Rate_Outlook_-_December_2017.pdf

Please find attached the December 2017 edition of the IGM Monthly Interest Rate Outlook.

Highlights:

Synchronised global economic growth is far from inducing synchronised global tightening, although the bias gathers steam. As IFI Senior Research Analyst Marcus Dewsnap writes, there is even a whiff of normalisation hints from the BoJ. A reason put forward in support of this thesis is the risk QE has in distorting the Japanese equity market � but there is evidence that is already occurring [pages 2-4].

  • Still, there's been no outright policy clue from the BoJ since it's last, October, policy meeting. Asia FX Analyst Jian Hui Tan notes that Governor Kuroda continues to insist that there's no need for further easing at this point, hence, it remains a case of not what the BoJ says, but what it does at its regular bond purchase operations which betray policy leanings. [Pages 5, 8].
  • No such veil at the Fed where a rate hike is fully priced for December, amidst yield curve flattening. Senior US Treasury Market Analyst John Kamerdin adds that as balance sheet reduction continues and the size is increased over the course of 2018, coinciding with increased Treasury issuance, the marketplace will enter uncharted waters. [Pages 5,7].
  • In Turkey, the monetary landscape has shifted sharply for the CBRT over the last month as an accelerated Lira sell-off has once again put pressure on the CB to tighten policy, preferably via conventional channels writes Emerging Market Managing Analyst Chris Shiells [Pages 6,13].
  • The BoK became the first CB in the Emerging Asia region to pull the trigger on rate hikes. The move was expected although the decision was not unanimous, but, as Emerging Market Analyst Freda Yeo points out, the CB is actively decoupling itself from the Feds hiking cycle. [Pages 6, 14-15].

Recommended Articles

  • IGM Credit, IGM FX and Rates

    IGM Launches Daily Quant-Based Trading Ideas with IGM G10 FX Playbook

    21 Jan 2021

    Boston, MA – (January 21, 2021) – IGM, a subsidiary of Informa plc (LSE: INF), a leading provider of solutions for financial services professionals, has launched the IGM G10 FX Playbook, offering financial institutions actionable analysis and talking points for client and in-house currency market trading strategy.

    Topics Industry News

  • IGM FX and Rates

    2020: That was the year that was - U.S. High grade primary markets

    22 Dec 2020

    2020 will be known for the Great Debt Binge when corporate America and a host of foreign companies raised an unprecedented amount of capital via the USD public debt market amidst the worst pandemic crisis in over a century...

    Topics Industry News

  • IGM FX and Rates

    2020 Year in Review

    By Jonathan Cavenagh 22 Dec 2020

    The positive risk bias at the start of 2020 for EM Asia assets didn’t last long. The synchronised global economic upswing quickly unravelled as the COVID pandemic swept through EM Asia economies. The epicentre of the pandemic was in China to begin with and as China went into lockdown Q1 was a write off for economic growth in the region. From a peak in mid-January to late March, the ADXY currency index lost 5%. There were significant divergences within the region though, with the IDR losing close to 15% against the USD, the baht 8.6% and INR 5.5%. IDR and INR are typically current account deficit currencies and sensitive to broader risk appetite, whilst the collapse in tourism inflows weighed heavily on the baht. In contrast, the PHP was basically flat against the USD in Q1, while the TWD only lost 0.67%. The Philippines has fairly limited offshore investor positioning, which served it well, while Taiwan managed the pandemic very well and this was reflected in relative currency outperformance…

    Topics Industry News

;

Any questions? Speak to a specialist

Would you like to request sample data or analysis from Informa Financial Intelligence? 

See how our tailored solutions can help you gain a competitive advantage: