MNI: PBOC Net Injects CNY37.3 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1843 Weds; -1.22% Y/Y

MNI BRIEF: Japan Nov CGPI Rises 3.7% Y/Y, Import Prices Drop

MNI BRIEF: Brazil Not Even Close To Fiscal Dominance - David

CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

MNI China Daily Summary: Tuesday, December 10

MNI: JAPAN NOV CORP GOODS PRICE INDEX +3.7% Y/Y; OCT REV +3.6%

MNI: USDA: 2024/2025 CORN PRODUCTION EST 15.14B BSL

EZ/UK T-Bill Calendar: 12-Month BOT Auction on Wednesday

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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

Goldman Sachs See Important Differences Between Easing Cycles

LATAM FX
  • Goldman Sachs think there are important differences between BCCh and BCB communication that will impact the FX response through the easing cycle.
  • In the case of Chile, in addition to the magnitude of the cut, forward guidance pointed to near-term policy rate cuts being “somewhat greater” than the central scenario of the June monetary policy report, even though the macroeconomic scenario has been developing as expected, implying a more dovish reaction function.
    • A significant erosion in the real policy rate coupled with the fact that FX carry is already relatively low and the central bank's reserve replenishment programme, suggests that monetary policy could prove to be a drag on the CLP over coming months.
  • In contrast, in Brazil, the split decision and a 50bp pace of cuts for the remainder of the year would only take the policy rate to +11.75% by year-end, thus eroding real rates less meaningfully than in Chile. In addition to this, the BCB has emphasised the easing cycle will be “gradual”. As such, barring a more hawkish shift in the BCCh’s reaction function, Goldman Sachs expect BRL to be relatively more insulated than CLP as both central banks continue to cut rates.
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.