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☆ Bank of England to leave rates on hold through mid-2024, cut in Q3
▼ + stars: | 2023-09-26 | by ( Shaloo Shrivastava | ) www.reuters.com time to read: +4 min

A pedestrian walks past the Bank of England in the City of London, Britain, September 25, 2023. Last week, the Bank surprised markets by not raising rates, sending sterling to a six-month low, but signalled rates would remain higher for longer. Still, over 40% of economists, 15 of 37, who answered an extra question said the BoE should hike rates again this year. Sixteen economists predicted Bank Rate at 5.00% in the third quarter, 10 forecast 4.75%, six said 4.50%, one expected 4.25% and one 3.75%. The European Central Bank was predicted to cut rates in the third quarter next year but the Federal Reserve might start in the second quarter, separate Reuters polls showed.

Persons: Hollie Adams, The BoE, BoE, James Smith, James Rossiter, Shaloo Shrivastava, Anitta Sunil, Purujit Arun, Jonathan Cable, Bernadette Baum Organizations: Bank of England, City of, REUTERS, Rights, Bank, Monetary, The, ING Financial Markets, TD Securities, European Central Bank, Federal Reserve, Thomson Locations: City, City of London, Britain

☆ 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

☆ Fed to leave rates unchanged on Sept. 20; cut unlikely before Q2 2024: Reuters poll
▼ + stars: | 2023-09-13 | by ( Prerana Bhat | ) www.reuters.com time to read: +5 min

"While there has been meaningful progress to date on inflation ... the Fed will not be able to take this for granted." Around 70% of those respondents, 62 of 87, had at least one rate cut by the end of next June. Still, all but five of 28 respondents to an extra question said the bigger risk was that the first Fed cut would come later than they currently forecast. A serious economic downturn could justify an earlier rate cut, but that is looking less likely. The economy was expected to expand by 2.0% this year and 0.9% in 2024, according to the poll.

Persons: Sarah Silbiger, Jerome Powell, Jackson, Brett Ryan, Andrew Hollenhorst, Citi's Hollenhorst, Prerana Bhat, Pranoy Krishna, Rahul Trivedi, Shaloo, Ross Finley, Paul Simao Organizations: Eccles Federal Reserve, Washington , D.C, REUTERS, Rights, Federal Reserve, Market, Fed, Reuters, Deutsche Bank, Consumer, Index, Citi, Thomson Locations: Washington ,, U.S

☆ Fed to leave rates unchanged on Sept. 20; cut unlikely before Q2 2024
▼ + stars: | 2023-09-12 | by ( Prerana Bhat | ) www.reuters.com time to read: +5 min

"While there has been meaningful progress to date on inflation ... the Fed will not be able to take this for granted." Only one said the Fed would cut rates this year. Around 70% of those respondents, 62 of 87, had at least one rate cut by the end of next June. Still, all but five of 28 respondents to an extra question said the bigger risk was that the first Fed cut would come later than they currently forecast. A serious economic downturn could justify an earlier rate cut, but that is looking less likely.

Despite that, the latest Reuters poll narrowly showed Bank Rate peaking at 5.50%, down from 5.75% predicted in July. All but one of 62 economists in the Aug. 16-23 poll expected Bank Rate to go up 25 basis points to 5.50% next month. The medians showed Bank Rate remaining on hold after September's hike until Q3 next year, though a significant minority - 47% or 29 of 62 economists - estimated a higher peak. That is a flip from a July poll when a slim majority, 51% or 31 of 61 participants, predicted Bank Rate at 5.75% or more by year-end. The wider poll showed inflation averaging 6.8% and 4.7% this quarter and next.

Persons: Luke MacGregor, BoE, James Smith, Simon Wells, Shaloo Shrivastava, Jonathan Cable, Mumal Rathore, Rahul Trivedi, Purujit Arun, Ross Finley, John Stonestreet Organizations: of, REUTERS, Bank of England, Reuters, ING, Reserve, European Central Bank, HSBC, Thomson Locations: of England, London, BRITAIN, BENGALURU, LONDON, Western Europe

REUTERS/Dado Ruvic/IllustrationBENGALURU, Aug 3 (Reuters) - The U.S. dollar will hold its ground against most major currencies over the coming three months as a resilient domestic economy bolsters expectations interest rates will remain higher for longer, according to FX strategists polled by Reuters. The dollar is unlikely to give up recent gains in coming months, according to the July 31-Aug. 2 Reuters poll of 70 FX strategists, which showed most major currencies would not reclaim their recent highs for at least six months. In response to an additional question, 27 of 40 FX strategists said net short USD positions would either not change much or decrease over the coming month, suggesting the dollar would be rangebound. Typically, these conditions often coincide with a more negative dollar outlook," said Kamakshya Trivedi, head of global FX at Goldman Sachs. At this point in time I wouldn't say so," said ECB President Christine Lagarde last week after delivering a widely anticipated 25 basis points (bps) rate increase.

Persons: Dado Ruvic, Kamakshya Trivedi, Goldman Sachs, Christine Lagarde, Kit Juckes, Sterling, Indradip Ghosh, Shaloo Shrivastava, Sujith Pai, Veronica Khongwir, Vijayalakshmi Srinivasan, Jonathan Cable, Ross Finley, Alex Richardson Organizations: REUTERS, U.S, Reuters, greenback, Federal Reserve, Central Bank, Fed, ECB, Societe Generale, Bank of England, bps, Bank of, Thomson Locations: U.S, Bank of Japan

☆ Bank of England rates set to peak at 5.75% by year-end: Reuters poll
▼ + stars: | 2023-07-25 | by ( Shaloo Shrivastava | ) www.reuters.com time to read: +3 min

BENGALURU, July 25 (Reuters) - The Bank of England will raise its Bank Rate by a quarter-point to 5.25% on August 3, making borrowing the costliest since early 2008, and hike twice more by the year-end as price pressures persist, a Reuters poll showed. While the median peak rate forecast was 5.75%, nearly half of respondents, 29 of 61, still said 5.50%, the same as a June 26 poll. As recently as a June 14 poll, the consensus was for Bank Rate to peak at 5.00%. Predictions for Bank Rate at year-end were in a wide range. Asked where core inflation will be at year-end, nearly two thirds of respondents, 14 of 22, said slightly lower.

Persons: BoE, Bruce Kasman, Morgan, Stefan Koopman, Shaloo Shrivastava, Mumal Rathore, Pranoy Krishna, Rahul Trivedi, Jonathan Cable, Ross Finley, Barbara Lewis Organizations: Bank of England, Bank, Company, Rabobank, Thomson Locations: BENGALURU, J.P, British

BENGALURU, July 6 (Reuters) - The U.S. dollar will hold its ground against most major currencies for the rest of the year despite expectations of narrowing interest rate differentials as the U.S. economy stays resilient, according to FX strategists polled by Reuters. "The tightness of the U.S. labour market may help the economy and the dollar in the very short term," said Kit Juckes, chief FX strategist at Societe Generale. "Even if we see (interest) rate convergence, it seems unlikely a new major euro uptrend will start without stronger growth." Indeed, a majority of common contributors showed the dollar view against most major currencies for the coming six months has been either upgraded or kept unchanged from a month ago. "The dollar is getting a tailwind from the Fed ... the current strength is on a repricing of the Fed (rate) higher," said John Hardy, head of FX strategy at Saxo Bank.

Persons: Jerome Powell, Kit Juckes, Jonas Goltermann, Sterling, John Hardy, Indradip Ghosh, Shaloo Srivastava, Sarupya Ganguly, Anitta Sunil, Veronica Khongwir, Hari Kishan, Ross Finley, Matthew Lewis Organizations: U.S, Reuters, Federal Reserve, European Central Bank and Bank of England, Societe Generale, Futures Trading Commission, Capital Economics, Saxo Bank, Thomson Locations: BENGALURU, U.S, Europe, Asia, Britain, Bengaluru

☆ Bond market divergence from Fed entrenched in U.S. yield forecasts
▼ + stars: | 2023-06-21 | by ( Sarupya Ganguly | ) www.reuters.com time to read: +3 min

Three-quarters of strategists, 15 of 20, who answered an extra question said the 2-year Treasury yield was unlikely to revisit its cycle peak over the coming three months. Only two of 27 respondents had the 2-year yield trading higher than the current level at the end of August. The benchmark 10-year note yield , meanwhile, was forecast to decline by much less, about 25 basis points over the coming six months. An inverted yield curve has historically been a reliable indicator of an oncoming recession but so far, having been inverted for almost a year, that has not happened. "Persistence of this configuration — continued growth along with above target inflation — will keep mild upward pressure on two-year and 10-year yields."

Persons: Jerome Powell, Bas Van Geffen, Robert Tipp, Sarupya Ganguly, Indradip Ghosh, Shaloo, Emelia Sithole Organizations: Reuters, Silicon Valley Bank, Rabobank, Fed, Thomson Locations: BENGALURU, Silicon

☆ Strategists slash U.S. yield view again despite Fed's inflation focus
▼ + stars: | 2023-04-12 | by ( Sarupya Ganguly | ) www.reuters.com time to read: +4 min

Yields on U.S. 2-year Treasury notes have plunged over 100 basis points following the failure of some regional U.S. banks last month. But markets are pricing for a series of interest rate cuts starting just two months later, underscoring an exceptionally large divergence from the central bank's own view. That recent downward trend in yields is forecast to continue further, according to the April 5-12 poll of over 60 bond strategists. However, in the coming three months, yields on both 2-year and 10-year notes were expected to rise 20 and 25 basis points, respectively, before resuming their fall. Relatively high volatility has also been a driver of yield forecasts over the past few months.

☆ RBA to hike rates 25 bps on April 4 but decision on a knife edge
▼ + stars: | 2023-03-31 | by ( Shaloo Shrivastava | ) www.reuters.com time to read: +4 min

BENGALURU, March 31 (Reuters) - Australia's central bank is expected to go for a final 25 basis point interest rate hike to 3.85% on Tuesday, although forecasts from economists polled by Reuters suggest the decision on whether to hike or hold rates is on a knife edge. However, eight of the 13 economists expecting a pause pencilled in a rate hike sometime in the second quarter. Although CBA and Westpac forecast a pause in April, they expect one more rate hike in the second quarter. Minutes from the March meeting showed RBA board members reconsidered the case for a pause at the following meeting, noting monetary policy was already in restrictive territory and the economic outlook was uncertain. Although the median forecast showed the cash rate would remain at 3.85% until the end of 2023, five economists predicted it to peak at 4.10%.

☆ Bank of England to lift rates to 4% on Feb 2, finish at 4.25% in March - Reuters poll
▼ + stars: | 2023-01-24 | by ( Jonathan Cable | ) www.reuters.com time to read: +3 min

REUTERS/Dado Ruvic/IllustrationLONDON, Jan 24 (Reuters) - The Bank of England will lift the Bank Rate by 50 basis points on Feb. 2 to 4.00% and then add another 25 basis points in March before pausing, according to a Reuters poll of economists who said the greater risk was that it would do even more. A firm majority, 29 of 42 respondents to the Jan. 18-24 poll, said the Bank would add 50 basis points next Thursday. Median forecasts in the poll showed the Bank would then add 25 basis points in March, giving a peak rate of 4.25%. Markets are pricing in a peak of 4.50% for Bank Rate. However, the poll showed GDP falling 0.3% this quarter and next and 0.1% in the third quarter.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) lost 0.2% in early trade. Nonetheless, the index is set to rise 4.2% for the week, hovering around the highest level since September. "I think the rally can probably continue but in the short-term the payrolls are the one to watch closely." The Euro hit a fresh five-month high at $1.0539 while the Japanese yen also scaled a new three-month high against the U.S. dollar. The Aussie dollar dipped slightly to $0.6796, after blowing past major resistance at 68 cents in the previous session, on Fed pivot hopes and China easing its zero-COVID policy.

☆ 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 Negara Malaysia set to hike for fourth time in a row on Nov. 3 - Reuters poll
▼ + stars: | 2022-11-01 | by ( Shaloo Shrivastava | ) www.reuters.com time to read: +3 min

Bank Negara Malaysia (BNM) started raising rates in May even though inflation was within its target range of 2%-3%. It has since hiked rates by 75 basis points to keep inflation in check. All but two of 27 economists in the Oct. 25-31 poll predicted BNM would hike its overnight policy rate by 25 basis points to 2.75% from 2.50% at its Nov. 3 meeting. While 13 of 18 penciled in a 25 basis point hike in Q1, three said 50 basis points. The median forecast showed the overnight policy rate would remain at 3.00% until at least the end of next year.

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