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_-_May_2018.pdf

Please find attached the May 2018 edition of the IGM Monthly Interest Rate Outlook.

Highlights:

  • Yields are heading higher offering tighter financial conditions. An oft cited contribution to the low yield environment is the global savings glut aka large current account surpluses. Senior Editor/Analyst Marcus Dewsnap points to evidence which suggests the surpluses may well begin to decline. More competition for a diminishing savings pool means higher yields need to be offered.
  • The BoJ jettisoned its timeline for hitting the inflation target, Senior FX Analyst Jian Hui Tan suggests this might not be a bad move, it is 'probably wise for them to remove an albatross around their necks which in turn allows them a degree of optionality in future policy moves (namely tweaking its YCC parameters).' [Pages 5, 8].
  • Despite Chf weakening to 1.2000 and inflation accelerating, Senior FX Analyst Mark Mitchell notes 'SNB President Jordan � was keen to stress that there is still a lot of work to be done before they even think about withdrawing some of their stimulus.' [Pages 5, 10]
  • Policy risk via FX channels casts a shadow over both the BCB and Banxico. Emerging Markets Managing Analyst Chris Shiells writes of the latter 'Since the Mxn hit 6/5mth highs versus the USD in mid-April, the currency has been on an EM leading slide against the Dollar and this has once again raised the slight chances of a rate hike over the next 6-months, with players eyeing volatility in markets after the now expected Presidential election victory of AMLO.' [Pages 6,16-17].
  • On the former, Emerging Markets Analyst Robert Graystone says 'we would maintain that the Real's path in the run up to the October election remains key to inflationary pressure and the path of monetary policy.' [Pages 6, 16]

Recommended Articles

  • IGM FX and Rates

    FX Viewpoint - Seasonality in June?

    By Tony Nyman 03 Jun 2020

    The USD has been an across the board loser in the very early part of June. It's now time to take our customary look at previous June's to see if there are any trends worth looking out for. In particular, how does the US Dollar tend to perform during the month and are there any G10s that tend to perform particularly well/badly through June? For more read our EM Viewpoint Blog >

    Topics Industry News

  • IGM Credit, IGM FX and Rates

    Monthly Issuance Volume Statistics in the Asia Pacific US$ Corporate Bond Market

    03 Jun 2020

    This month, Credit Analysts Sylvia Xu and Andrew Perrin look at monthly issuance volume statistics in the Asia Pacific US$ corporate bond market across rating type, asset class and jurisdiction and more…

    Topics Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Messages From NPC Are Less Dovish Than Expected

    By Tim Cheung 02 Jun 2020

    The NPC ended on Thursday (28 May). In the post-NPC press conference, Premier Li Keqiang gave a couple of remarks: - China will not hesitate to loosen policy more if needed. The focus of the policy loosening is not on infrastructure but on consumption. It's worth noting that Premier Li, unlike in the past, this time didn't say he would maintain ample liquidity in the financial system. - Premier Li Keqiang did not agree with the market's statement that the planned policy package is not strong enough. He said the magnitude of the policy package is reasonable, indicating low possibility of aggressive stimulus in the near term. Overall, Premier Li's remarks reflect central government's intention to avoid being too dovish in the aftermath of COVID-19.

    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: