MNI: UK JULY UNEMPLOYMENT RATE 4.1% - ONS

MNI BRIEF: China Aug Exports Up 8.7% Y/Y, Surplus $91.0 Bln

MNI BRIEF: China August Crude Oil Imports Increase From July

CHINA AUG EXPORTS +8.7% Y/Y VS MEDIAN +6.6% Y/Y: CUSTOMS

MNI: PBOC Net Injects CNY184.8 Bln via OMO Tuesday

MNI: PBOC Sets Yuan Parity Higher At 7.1136 Tues; +3.19% Y/Y

MNI: GERMANY AUGUST FINAL HICP -0.2 % M/M, +2.0% Y/Y

MNI: GERMAN AUG CPI +1.9 % Y/Y

MNI: NORWAY AUG CORE CPI -0.7% M/M, +3.2% Y/Y

AUSTRALIA: Albanese Lines Up Budget for May Election

AUSTRALIA: Albanese Lines Up Budget for May Election

UK: Week Ahead

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Goldman Sachs Expecting A Terminal Rate Of 9.75%

CHILE
  • Goldman Sachs expect the BCCh to hike its policy rate by 100bp to 9.25%. They assign a 30% probability of a milder 75bp increase given the dovish biases the MPC has revealed in past meetings.
  • Since the May meeting, inflation continued to surprise to the upside with upward pressures from both demand (the output gap remains positive, commerce activity remains vigorous and households’ still have substantial liquidity) and costs (high commodity prices, high producer prices (26.2% y/y) and nominal wage growth (7.4% y/y)).
  • In addition, GS anticipate another significant inflation print in May (1.0% m/m) which should drive annual headline inflation above 11.0%.
  • The day after the MPC Meeting, the central bank will publish its June Monetary Policy Report (IPoM). GS expect the central bank to update their forecast for inflation and to provide a detailed discussion of the outlook for monetary policy including an upward revision to their monetary policy interest rate corridor with some hikes shown for the next couple of meetings. In general, the central bank’s IPoM model has shown significant sensitivity to the output gap, and given the central bank’s expected growth path (output gap to close in 4Q2022, slightly negative in 2023), the IPoM policy rate corridor is likely to show some easing from the high restrictive policy rates as soon as the first half of 2023.
  • Yet, their econometric work suggests that the output gap has a moderate impact on inflation in Latin America, explaining only approximately 5% of the variation of headline inflation and 10% of core. Furthermore, private consumption has remained resilient and household’s still hold significant liquidity in their checking accounts.
  • Overall, GS believe that the MPC will need to raise the policy rate further in the next couple of meetings to a terminal rate of 9.75%, and they expect monetary policy to remain tight over the relevant policy horizon.
BulletEM BulletEmerging Market NewsHomepage
BulletEM BulletEmerging Market NewsHomepage

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.