Thursday 26th May 2022
The increasing belief amongst central bankers – particularly in New Zealand and the US – is that faster rate hikes will have a more marked impact on fighting inflation, giving more flexibility on how to handle the issue later in the year. NAB’s Rodrigo Catril isn’t sure that a couple more 50 basis point hikes from the FOMC will be enough. Supply chain issues remain for goods, and consumers need to be torn away from their rising consumption of services. Today, Australia’s Q1 Capex numbers are worth looking out for. Also today, if the world seems a worrying place right now (particularly if you’ve been listening to George Soros), calm yourself down with a picture of a fluffy cat. It worked for our host.
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More central bankers wanting to ease off the pedal
The pound rises as the BoE’s Gertjan Vlieghe talks rate rises of the UK next year, but NAB’s David de Garis says the argument was more nuanced than the market response would suggest.
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All Quiet until Trump Talks
A quiet day today, except for some volatility in oil prices. But NAB’s Tapas Strickland tells us to be ready for Netflix earnings and whatever President Trump says at Davos.
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A Big Day for Europe
The real deadline for a UK-EU trade deal is really the weekend, says NAB’s Rodrigo Catril, so don’t expect much today from the Johnson – von der Leyen dinner date. We’ll also be watching for an indication of the length of the ECB’s bond buying program today.
