MNI China Daily Summary: Thursday, December 12

RPT-MNI BOC WATCH: More Gradual Approach Seen After 50BP Cut

MNI BRIEF: Beijing To Protect Firms From U.S. Bill - MOFCOM

MNI: PBOC Net Injects CNY28.8 Bln via OMO Thursday

MNI: PBOC Sets Yuan Parity Higher At 7.1854 Thurs; -1.13% Y/Y

MNI: BRAZIL'S COPOM RAISES SELIC RATE BY 100BPS TO 12.25%

MNI: SWEDEN FINAL NOV CPIF +1.8% Y/Y

MNI:AUSTRALIA NOV UNEMPLOYMENT RATE +3.9%

MNI: US NOV TREASURY BUDGET -$366.8B

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

GS push forward first BOE hike forecast

BOE
  • Goldman Sachs has pushed forward its initial Bank Rate hike to May 2022 (15bp) "to be followed by subsequent increases of 25bps every two quarters, putting Bank Rate at 0.5% in 2022Q4, 0.75% in 2023Q2 and 1.0% in 2023Q4."
  • They expect reinvestments to cease when Bank Rate reaches 0.5% in Q422 and then "the BoE to begin active asset sales in 2024, after hitting the stated 1.0% threshold at the end of 2023." They expect the BOE to "pause the hiking cycle in 2024 in order to assess the impact of asset sales."
  • Previously GS expected the first (15bp) hike in Q3-23 with a further 25bp in Q1-24 accompanied by balance sheet runoff and then 25bp more in Q3-24 to 0.75%.
  • GS made the change following yesterday's labour market data and note that they "now see scope for greater re-absorption of furloughed workers back into employment after 30 September relative to our previous expectation that around 250k furloughed workers would become unemployed during Q4. As a result, our revised unemployment rate forecast has a sharper decline in Q3 followed by an increase to a peak of around 4.9% in Q4—a less disruptive outcome than we previously expected but an unemployment rate that still peaks slightly above the BoE's modal path in the August MPR"
  • GS also note that the 4-4 split of MPC members who announced they thought the necessary (but not sufficient) criteria for tightening had been set will move to 5-4 as "we believe the newly appointed Chief Economist, Huw Pill, is likely to join the group of internal members thinking the minimum conditions for tightening policy have been met. This news implies an earlier rate increase than we previously thought."
HomepageGoldman Sachs Market NewsBank Of England (BOE) Market NewsBulletUKMarketsFixed Income BulletsForeign Exchange Bullets
HomepageGoldman Sachs Market NewsBank Of England (BOE) Market NewsBulletUKMarketsFixed Income BulletsForeign Exchange Bullets

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.