Free Trial
USDCAD TECHS

Bouncing Ahead of 200-DMA Support

AUDUSD TECHS

Bullish Conditions

Real-time Actionable Insight

Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.

Free Access

View Change: Nomura: “Few barriers” to 50bp in Sep, but look for 2023 cuts

BOE
  • “We have adjusted our view and now see few barriers to another 50bp hike on 15 September (versus our previous view of 25bp). That would then take rates to 2.25%, following which a final 25bp hike in November would leave rates at a terminal level of 2.50% before modest (2x25bp) rate cuts in mid-2023.”
  • The “decision shows that the Bank sees neither i) a protracted recession… nor ii) a sizeable expected undershoot of inflation below its target at the end of the forecast horizon, as constraints to speeding up the pace of monetary tightening. The burden of proof appears to have shifted – for the economic data to deteriorate meaningfully enough over the coming month and a half in order to stop the Bank from what now feels like the default option of raising rates by another 50bp at its September meeting.”
  • “In terms of justifying our 2023 rate cut call – maintaining rates through a slowdown is one thing, but to do so through a 2-year recession is likely to prove too much of a stretch.”
  • “The Bank seems less wedded to its forecasts than normal, having specified multiple possible projection profiles this time: a baseline, plus another based on energy prices following the futures curves after six months, and a further projection based on “greater persistence in domestic price setting”.
222 words

To read the full story

Why Subscribe to

MarketNews.com

MNI is the leading provider

of news and intelligence specifically for the Global Foreign Exchange and Fixed Income Markets, providing timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. We offer not simply news, but news analysis, linking breaking news to the effects on capital markets. Our exclusive information and intelligence moves markets.

Our credibility

for delivering mission-critical information has been built over three decades. The quality and experience of MNI's team of analysts and reporters across America, Asia and Europe truly sets us apart. Our Markets team includes former fixed-income specialists, currency traders, economists and strategists, who are able to combine expertise on macro economics, financial markets, and political risk to give a comprehensive and holistic insight on global markets.
  • “We have adjusted our view and now see few barriers to another 50bp hike on 15 September (versus our previous view of 25bp). That would then take rates to 2.25%, following which a final 25bp hike in November would leave rates at a terminal level of 2.50% before modest (2x25bp) rate cuts in mid-2023.”
  • The “decision shows that the Bank sees neither i) a protracted recession… nor ii) a sizeable expected undershoot of inflation below its target at the end of the forecast horizon, as constraints to speeding up the pace of monetary tightening. The burden of proof appears to have shifted – for the economic data to deteriorate meaningfully enough over the coming month and a half in order to stop the Bank from what now feels like the default option of raising rates by another 50bp at its September meeting.”
  • “In terms of justifying our 2023 rate cut call – maintaining rates through a slowdown is one thing, but to do so through a 2-year recession is likely to prove too much of a stretch.”
  • “The Bank seems less wedded to its forecasts than normal, having specified multiple possible projection profiles this time: a baseline, plus another based on energy prices following the futures curves after six months, and a further projection based on “greater persistence in domestic price setting”.