Author Archive

Trade and disinflation keep central banks dovish

Global central bank rhetoric has turned even more dovish lately, encapsulated by the latest Federal Reserve (Fed) meeting and the European Central Bank (ECB) policy forum in Sintra, both in June. With global manufacturing slowing and inflation failing to pick up much, the Fed has signalled clearly that its next move might be a rate […]

A spanner in the works

At the weekend, US President Trump threatened to increase the tariff rate on Chinese imports as he believes that US-China trade negotiations are going “too slowly”. Importantly, Trump’s threats do not mean bilateral talks are breaking down. Indeed, the Chinese government confirmed today that its trade delegation would still go to Washington DC this week […]

Brexit update: a very British fudge

Following the EU Council summit, 31 October 2019 is the new Brexit deadline. Given that we see limited probability of a sudden unknotting of the current UK parliamentary gridlock, our core scenario is that the deadline will be extended again. The current timeframe is too short to really work on an alternative to the current ‘Withdrawal Agreement’, which has […]

Indian elections start today

Today, India’s 2019 general elections to determine the next Lok Sabha (the lower house) kick off. India is divided into 543 constituencies, each represented by one member of the Lok Sabha. The party or the coalition that wins a simple majority (272 seats) will form the government. Nearly 900 million voters across the nation will head to […]

Brazil pension reform: Bolsonaro’s moment of truth

The sharp deterioration of Brazil’s public debt in recent years, triggered by a deep recession in 2014-2016, now requires the imminent restoration of fiscal balance in order to bring public finances back on to a more sustainable path. In this regard, pension reform is widely seen as the single largest source of long-term fiscal savings, […]

Brexit update: UK parliament opts for an extension

The British Parliament concluded a series of votes on Brexit this week with an intention to extend the 29 March Brexit deadline. What remains unclear at this point is whether the UK will seek a short (two months) or a longer extension (two years). It is also not clear what this extension would be used for. A longer extension would help to […]

ECB: to LTRO, or not LTRO, what is the question?

Considering the weakness in most economic indicators the ECB should maintain an adequate degree of monetary accommodation. This will likely require delivering another longer-term refinancing operation (LTRO, targeted or not) to avoid any tightening in liquidity and credit conditions. We expect the ECB to send out a strong signal at its March meeting that it […]

Brexit update

Recent political developments in the UK and the increased focus on an extension to the current Brexit deadline in particular, have reduced the risk of a ‘no deal’ Brexit on 29 March. Prime Minster Theresa May will put her divorce deal to another Parliament vote on 12 March. While the vote will likely be much narrower than […]

Brexit update – UK Parliament spins its wheels

A series of votes in the British parliament resulted in little new progress on the Brexit front; the outcome being that Theresa May will return to Brussels to attempt to improve her ‘deal’, which a new parliamentary vote scheduled for mid-February. However, Brussels has rejected the idea of reopening negotiations and it is not clear […]

Brexit update – PM May seeks new direction

This week, the British Parliament rejected Theresa May’s divorce deal en masse. At the same time, she has kept enough support to stay in power, as a motion of no confidence was rejected. How the Brexit process unfolds from now remains highly uncertain. The recent turn of events means there is an increasing probability of […]

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