###POV: COULD THERE BE RATE...>

GLOBAL MARKET/OPINION: ###POV: COULD THERE BE RATE HIKES BY ALL 3 CENTRAL BANKS

(FED, ECB & BOE) AT THE SAME TIME?

- Looking at MNI PINCH, the likely time that all 3 central banks could hike

rates is in Feb/March 2019. At the moment there is a 60% chance of Fed hiking

rates to 2.25%/2.50% at March 2019 meeting, a 100% chance of the ECB raising its

deposit rate by 10bp in March 2019 and a 90% chance of the BoE raising rates to

1.00% at Feb MPC meeting.

- The chance of the Fed increasing rates in March 2019 could easily rise if US

data show continued growth and inflation rising to target. While March 2019

seams to be a favourite time for Markets to price in first ECB rate hike. While

in the UK unless there is a drastic change in unemployment or level of spare

capacity the BoE is likely to continue its slow path of rising rates.

- By MNI calculations the last time interest rates were increased at the same

time by all 3 central banks was back in February 2000. Shortly after the Dot Com

bubble burst and the Nasdaq index fell from 5,000 to 3,000 in 2-months.