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Philippines Policy Rate 6.5% (consensus 6.5%) in Apr-24

• The BSP’s decision to maintain the policy rate at 6.5% reflects a strategic response to a modest uptick in inflation forecasts and the challenge of balancing inflation mitigation with economic growth, indicating a cautious yet proactive approach to monetary policy management.
• Despite the upside risks to inflation, particularly from supply-side pressures, the Monetary Board’s confidence in keeping inflation expectations anchored assumes the effectiveness of the current policy stance in maintaining inflationary stability.
• The BSP’s emphasis on economic growth prospects and its readiness to adapt policy settings in response to shifting economic and inflationary landscapes highlight a commitment to flexible and forward-looking monetary policy, ensuring price stability and sustained economic health.

Switzerland Unemployment Rate 2.3% (consensus 2.2%) in Mar-24

- Switzerland's unemployment rate for March 2024 was 2.3%, slightly higher than expected and the highest since February 2022.
- The rate is 0.19% above the one-year average, suggesting an unfavourable employment situation through the slightly rising trend.

HEM: Rolling Precariously

• Data are resilient, but markets doubt the policy effect
• Rising unemployment would signal a need for rate cuts
• UK wage settlements support a high floor in inflation
• Excess demand and inflation delay BoE cuts to Feb-25
• The Fed and ECB may only delay to Sep-24

HEW: Data Keeps Doves Locked up

• During the past fortnight, data releases have continued their resilient trends, with output surveys and payrolls typically beating consensus expectations. These are inconsistent with policy being too tight, so rate cuts should remain locked up.
• Next week is relatively quiet for data releases but features monetary policy decisions for the Euro area, Canada, New Zealand, Thailand, Philippines, South Korea and Peru. We expect the ECB to maintain data dependence rather than commit to a June cut.

By Philip Rush