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☆ BoC likely done raising rates, to cut by mid-2024 say economists: Reuters poll
▼ + stars: | 2023-10-20 | by ( Milounee Purohit | ) www.reuters.com time to read: +4 min

The risk of a revival in inflation, last measured at 3.8%, has led most to forecast now is not the time for the central bank to strongly signal they are done raising rates. Twenty-nine of 32 economists polled Oct. 13-20 expect no change to the central bank's 5.00% overnight rate (CABOCR=ECI), with the remaining three expecting a 25 basis point hike. While most are confident the central bank is done hiking, a significant minority of economists who answered an additional question, 8 of 18, said the risk of the BoC raising rates at least once more is "high". Still, a two-thirds majority, 20 of 30, see the BoC cutting its overnight rate at least once before end-June 2024. The distribution of where economists saw the overnight rate by end-June was split many ways.

Persons: Randall Bartlett, underscoring, Tony Stillo, Milounee Purohit, Maneesh Kumar, Ross Finley, Jonathan Oatis Organizations: Bank of Canada, BoC, Desjardins, U.S . Federal Reserve, Oxford Economics, Bank, Thomson Locations: BENGALURU, Canada

☆ Bank of England to raise Bank Rate to 5.50% in September, significant minority expect further hike: Reuters poll
▼ + stars: | 2023-09-14 | by ( Shaloo Shrivastava | ) www.reuters.com time to read: +4 min

Nearly all 65 economists in the Sept. 11-13 Reuters poll expected the BoE to hike its Bank Rate by 25 basis points to 5.50% this month, in line with interest rate futures pricing. Survey medians showed the Bank Rate was expected to peak at 5.50%, matching rate futures pricing, and stay there until mid-2024. While 28 economists expected the Bank Rate to peak at 5.75%, two said 6.00%. Nine of 16 gilt-edged Market Makers (GEMMs) that participated in the poll predicted a 5.50% peak rate and seven said 5.75%. A separate Reuters poll showed average house prices in Britain were predicted to fall 4% this year and flatline in 2024 before rising in 2025.

Persons: BoE, Maja Smiejkowska, Ellie Henderson, BoE Governor Andrew Bailey, Catherine Mann, Shaloo Shrivastava, Anitta Sunil, Purujit Arun, Maneesh Kumar, Pranoy, Ross Finley, Hari Kishan, Mark Potter Organizations: Bank of England, REUTERS, Rights, Reuters, HSBC, MPC, Royal Institution, Chartered Surveyors, Thomson Locations: London, Britain, Investec

With average house prices having surged 25% during the COVID-19 pandemic, higher interest rates and higher living costs in a struggling economy have driven many to rent while they anticipate house prices will fall. All but one predicted prices would fall this year. House prices were forecast to stagnate next year, an upgrade compared to the 2.0% fall predicted three months ago. That comes after many years of close to zero and negative policy interest rates following the global financial crisis and during the pandemic. Eleven of 14 respondents said rental affordability would worsen over the coming year.

Persons: Thomas Peter, Carsten Brzeski, Brzeski, Sebastian Schnejdar, Indradip Ghosh, Anitta Sunil, Maneesh Kumar, Ross Finley, Barbara Lewis Organizations: REUTERS, Reuters, Housing, ING, European Central Bank, Analysts, Thomson Locations: Berlin, Germany, Europe's

☆ ECB to pause in September, say slim majority of economists: Reuters poll
▼ + stars: | 2023-08-11 | by ( Prerana Bhat | ) www.reuters.com time to read: +4 min

There have been nine consecutive ECB rate rises since July 2022. In the poll 37 - or 53% - of 70 economists predict no move at the Sept 14 meeting compared with 47% in last month's poll, which would mean the ECB leaving its deposit rate at 3.75%, in line with market pricing. The poll also showed 53% expecting a deposit rate rise to 4.00% sometime this year, with 33 economists saying September, and four October or December. While markets are priced for a roughly 60% chance of a pause in September, they are split for year-end, with just over a 50% probability of a 4.00 deposit rate by then. However, inflation setbacks could still force a rate hike later this year," said Bas van Geffen, senior macro strategist at Rabobank.

Persons: Christine Lagarde, bloc's, Lagarde, Bas van Geffen, Michael Kirker, Prerana Bhat, Anitta Sunil, Maneesh Kumar, Sarupya Ganguly, John Stonestreet Organizations: European Central Bank, Reuters, ECB, Rabobank, spillovers, Deutsche Bank, Thomson Locations: BENGALURU, Germany, Ukraine, European

Inflation is falling, with the headline consumer price index (CPI) measure slowing to 3.0% in June from 4.0% in May. The current debate is whether more rate increases might be needed to ensure "disinflation" continues or if doing more could cause unnecessary damage to the economy. Core PCE was last reported at 3.8% for May. But none of the inflation gauges polled by Reuters - CPI, core CPI, PCE and core PCE - were expected to reach 2% until 2025 at the earliest. A slight majority of economists who answered an additional question, 14 of 23, said wage inflation would be the most sticky component of core inflation.

Persons: Jerome Powell, Jan Nevruzi, Doug Porter, Indradip Ghosh, Prerana Bhat, Maneesh Kumar, Ross Finley, Paul Simao Organizations: U.S . Federal Reserve, Reuters, Fed, NatWest Markets, PCE, CPI, BMO Capital Markets, Thomson Locations: BENGALURU, U.S

That hawkish change in market expectations has helped boost the U.S. dollar to its highest level since March. Just over 25% of economists in the poll, 23 of 86, forecast at least one Fed rate cut by the end of 2023, but that is down from 28% in the last poll. The U.S. Labor Department is due to release consumer price inflation data on June 13, the first day of the Fed meeting. "If most Fed officials feel at least another 25-basis-point hike will be necessary, it seems simplest to deliver that hike in June rather than 'skip'." Inflation as measured by core PCE was forecast to remain above 2% at least until 2025.

Persons: Jerome Powell, Powell, Philip Marey, Janet Yellen, Andrew Hollenhorst, Oscar Munoz, Prerana Bhat, Indradip Ghosh, Vijayalakshmi Srinivasan, Maneesh Kumar, Ross Finley, Mark Potter, Paul Simao Organizations: U.S . Federal, Reuters, U.S, Rabobank, Treasury, Bank of Canada, U.S . Labor Department, Citi, National Bureau of Economic Research, TD Securities, Thomson Locations: BENGALURU, U.S, Canadian

Average house prices as measured by the S&P CoreLogic Case-Shiller composite index of 20 metropolitan areas were forecast to stagnate next year. "Looking ahead, we think there is scope for prices to fall a little further. "Given supply is likely to stay tight, there is a risk house prices may not fall as much as we previously expected." The 30-year fixed mortgage rate, currently around 6.7%, was expected to average 6.2% in 2023. Those high mortgage rates are restricting housing supply, which puts upward pressure on prices, as well as demand.

Persons: Sam Hall, haven't, Sal Guatieri, Indradip Ghosh, Prerana Bhat, Aditi Verma, Maneesh Kumar, Jonathan Cable, Ross Finley, Sharon Singleton Organizations: stagnating, Reuters, U.S . Federal Reserve, Capital Economics, BMO Capital Markets, Thomson Locations: BENGALURU

"Put simply, inflation is more than double the Fed's target rate and the unemployment rate is below every FOMC participant's estimate of the natural rate. "In our view, rather than lean against a mild recession, the Fed would view it as an acceptable price for bringing inflation back down to target." A slight majority, 22 of 41 respondents, said the risk of a default was higher this time compared to prior episodes of debt ceiling brinkmanship. Elevated worries about a default will push U.S. Treasury yields higher over the coming weeks, a separate Reuters poll showed. The macroeconomic consequences of a short default would be somewhat more severe."

☆ ECB to raise deposit rate by 50 bps on Dec 15 as bloc enters winter recession: Reuters poll
▼ + stars: | 2022-12-09 | by ( Jonathan Cable | ) www.reuters.com time to read: +4 min

According to the Dec. 5-8 Reuters poll, banks will earn 2.00% on deposits after policymakers meet on Thursday, the most since 2009. The refinancing rate will also move up by 50 basis points, to 2.50%. When it last met in late October, the Governing Council topped up key rates by 75 basis points. The U.S. Federal Reserve is also widely expected to downshift to a 50 basis point move following four consecutive 75 basis point increases at the conclusion of its policy meeting on Wednesday, the day before the ECB decision. Findings in the poll agreed and showed inflation would top out this quarter, at 10.3%, and then decline.

The findings highlight how the housing market, one of the biggest employers in a country of around 1.4 billion people, is likely to remain a stable contributor to growth in Asia's third-largest economy going forward. Relatively modest interest rate risk partly explains why all but one of 10 analysts who answered an additional question said the chances of a significant slowdown in the housing market over the coming year were low. Nine of 11 respondents said either an economic slowdown or rising rates would be the biggest challenge for first-time homebuyers. "While India ... has been quite resilient amidst global disturbances, the chances of a slowdown in India cannot be ruled out," said Anuj Puri, chairman of ANAROCK Property Consultants. (For other stories from the Reuters quarterly housing market polls:)Reporting by Milounee Purohit and Indradip Ghosh in Bengaluru Polling by Maneesh Kumar Editing by Hari Kishan, Ross Finley and Matthew LewisOur Standards: The Thomson Reuters Trust Principles.

☆ India stocks to rise 9% by end-2023 despite slowing economy - Reuters poll
▼ + stars: | 2022-11-30 | by ( Indradip Ghosh | ) www.reuters.com time to read: +3 min

Summary poll dataBENGALURU, Nov 30 (Reuters) - India's stock market, which rallied to a record high this week, is forecast to rise another 9% by the end of 2023 despite widespread expectations of a gradual slowdown in the economy, according to market experts polled by Reuters. The benchmark BSE Sensex Index (.BSESN) touched an all-time record high of 62,887.40 on Tuesday, surging more than 23% from this year's low of 50,921.22 hit on June 17. The Sensex was then forecast to rise to 68,000 by end-2023, for a total gain of around 9%. The Nifty 50 (.NSEI), which has also hit a record high, was forecast to gain 4.7% from Tuesday's close of 18,618.05 to 19,500 by mid-2023, and reach 20,500 by end-2023. But by most measures, the Indian market looks overbought.

☆ China's factory activity contraction likely deepened in Nov on COVID woes
▼ + stars: | 2022-11-28 | by ( ) www.reuters.com time to read: +2 min

BEIJING, Nov 28 (Reuters) - China's factory activity is expected to have contracted further this month, piling pressure on the economy as COVID restrictions hit production and exports fell despite a flurry of stimulus policies, a Reuters poll showed on Monday. China's economy is poised to miss the "around 5.5%" full-year government growth target with gross domestic product expanding just 3% in the first three quarters of this year. Chinese advisers say they will recommend a modest growth target for 2023 ranging from 4.5% to 5.5% to an annual policymakers' meeting in December. The official manufacturing PMI, which largely focuses on big and state-owned firms, and its survey for the services sector, will be released on Wednesday. The private sector Caixin manufacturing PMI, which centres more on small firms and coastal regions, will be published on Thursday.

☆ India's economy likely slowed to annual 6.2% in July-Sept: Reuters poll
▼ + stars: | 2022-11-28 | by ( Indradip Ghosh | ) www.reuters.com time to read: +2 min

Summary Data due at 1200 GMT on Wednesday, Nov. 30BENGALURU, Nov 28 (Reuters) - The Indian economy likely returned to a more normal 6.2% annual growth rate in July-September after double-digit expansion in the previous quarter, but weaker exports and investment will curb future activity, a Reuters poll showed. In April-June, Asia's third-largest economy showed explosive growth of 13.5% from a year earlier thanks mainly to the corresponding period in 2021 having been depressed by pandemic-control restrictions. The 6.2% annual growth forecast for latest quarter in a Nov. 22-28 Reuters poll of 43 economists was a tad lower than the RBI's 6.3% view. Meanwhile, the RBI raised its key policy interest rate to 5.9% from 4.0% in May and is widely expected to add another 60 basis points by the end of March. "Between December and February, the headwinds to growth may become more evident," said Deutsche Bank's Das.

South Korea's economic growth was fast losing momentum at latest measure as higher living costs erode household income and crimp demand, pressuring the Bank of Korea (BoK) to strike a balance between inflation and growth. All but one of 30 economists in the Nov. 15-21 poll forecast the BoK would raise its policy rate (KROCRT=ECI) by 25 basis points to 3.25% on Thursday. If the majority view prevails, the BoK will take rates to the highest level since 2012. "Amid climbing concerns about growth and the credit market, the case for hiking at a more gradual pace has strengthened further." Nearly 60% of respondents, 17 of 30, forecast another hike by 25 basis points by end-March, taking rates to 3.50%.

☆ Philippine central bank to raise rates by 75 bps- Reuters poll
▼ + stars: | 2022-11-15 | by ( Shaloo Shrivastava | ) www.reuters.com time to read: +2 min

The BSP has already raised its key rate by a total of 225 basis points since May. Three-quarters of respondents, 12 of 16, forecast a 50 basis point rise in December to 5.50%. Six of 16 expected a 50 basis point hike, five expected a 25 basis point move while five others did not expect any move after December. The median forecast shows a higher terminal rate of 5.75% by end-Q1, compared with expectations of 5.00% by end-December in a September poll. Four big banks, Goldman Sachs, Nomura, DBS and UOB, estimated a terminal rate as high as 6.00% while HSBC predicted 6.25%.

☆ Bank of England to hike by 75 bps on Nov. 3 but may go bigger
▼ + stars: | 2022-10-25 | by ( Jonathan Cable | ) www.reuters.com time to read: +4 min

Annual price rises were expected to peak at 10.4% this quarter, the poll showed, before gradually declining, but won't fall to target until at least 2025. The median forecast in the Oct. 18-25 poll showed the BoE would take Bank Rate up by 75 bps to 3.00% next week. But while that was a view held by 18 of 30 respondents, 10 expected 100 bps, one said 125 bps and one said 150. It was then expected to add another 75 bps in December and 50 bps next quarter before pausing, meaning rates would peak at 4.25% in the current cycle. Both the European Central Bank and the U.S. Federal Reserve are expected to deliver 75-bps increases at their next meetings.

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