Archive

March 25, 2024
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Oil: A Fine Line

  • The IEA’s recent shift in its 2024 supply/demand forecast closer to Opec’s is premised on relatively bullish estimates for the Chinese and US economies coupled with continued Opec+ discipline. None of these is a given.

By Alastair Newton


March 22, 2024
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Lane - Inflation and monetary policy

Slides by Philip R. Lane, Member of the Executive Board of the ECB, at the Policy Lecture at Aix-Marseille School of Economics (AMSE) in Marseille

In this speech by Philip R. Lane, he discusses the monetary policy outlook in the context of a significant shifts in the global economy. He emphasizes that the short-term rate is used as the policy instrument and highlights the benefits of interest paid on reserves. While the growth outlook for the euro area has been revised upwards, Lane acknowledges high uncertainty and the dependence of inflation dynamics on a reduction in slack. The Governing Council is expected to look through any temporary inflation increase, and an ample degree of monetary accommodation is deemed necessary. Lane emphasizes that monetary policy is determined by the collective action of the Governing Council and is not influenced by external factors.


Positivity Score: 75
Uncertainty Score: 80

March 22, 2024
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HEW: Doves Fly Into Holidays Again

  • Most releases over the past week may not have been that surprising, but the market read central bank decisions as worth letting dovish trades fly into another holiday season. Then Andrew Bailey forgot he sucks at guidance, and he crashed the currency.
  • The fortnight ahead is much quieter for releases, partly because of the Easter holidays. Highlights for us are flash HICP on the data front, while Chile and the Riksbank are it for policy. This publication will take its usual Easter break and return in a fortnight.

By Philip Rush


March 21, 2024
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Mexico Policy Rate 11.0% (consensus 11.0%) in Mar-24

  • Banco de México reduced the overnight interbank interest rate by 25 basis points to 11.00%, aligning with economic consensus, responding to decreasing inflationary pressures and the prospect of increased global economic activity.
  • Annual headline inflation has decreased to 4.4% and core inflation to 4.64% amid economic dynamism and a strong labour market. The central bank is trying to foster growth while managing inflation expectations.
  • The Governing Board will continue to assess economic and inflationary developments. It will maintain a restrictive policy stance in a cautious yet adaptable approach to ensure the orderly convergence of inflation to the 3% target.