Archive

January 29, 2026
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Riksbank Pauses in Turbulent Times

  • The Riksbank holds its policy rate at 1.75% as expected, with an unchanged outlook, supporting growth and 2% inflation target amid a resilient economy.
  • ​Krona strength and VAT cuts heighten downside inflation risks, potentially prompting rate cuts over hikes if pressures persist into 2026.
  • ​Geopolitical shocks raise uncertainty, but the vigilant Riksbank is prepared to adjust rates if US tariffs erode Swedish growth and sentiment rapidly.
January 29, 2026
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MAS Pivots to Tightening Path

  • MAS holds S$NEER policy unchanged while raising 2026 core inflation forecasts to 1.0-2.0% vs 0.5-1.5% prior. This inflation normalisation creates scope for future band steepening if wage pressures materialise.​
  • Growth resilience and rising unit labour costs shift the outlook hawkishly. A positive output gap persists, and upside inflation risks from wages/geopolitics favour policy tightening over 2026.
  • A July steepening is likely if Q2 data confirms momentum: Current settings risk a 2%+ inflation trajectory incompatible with the price stability mandate without adjustment.
January 28, 2026
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Brazil Holding Before the Cut

  • Brazil's Copom holds Selic at 15% as expected. It signalled easing in March if inflation moderates, while maintaining a contractionary stance through 2026.
  • Deanchored expectations (4.0% 2026, 3.8% 2027) constrain the cutting pace despite headline inflation below 4.5%.
  • Fiscal stimulus vs monetary restraint dilemma: a 50bp March cut is likely, but the pace depends on labour market cooling and currency stability.
January 28, 2026
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Canada: Trade Risk and Rate Flexibility

  • The Bank of Canada held rates at 2.25%, as expected, with this second straight hold signalling a cautious pause as policy is firmly data‑dependent.
  • With core inflation easing but still near 2.5% and unemployment elevated, rates are likely on hold through 2026 unless inflation or growth deviates materially.
  • Trade uncertainty and CUSMA talks are key wildcards; the next move (probably a hike) is seen in 2027 if growth and inflation remain near projections.

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