Central Banks latest publications
Libra, Facebook's proposed global digital currency, has disappointed, with several partners abandoning the initiative and severe rejection by countless authorities on both sides of the Atlantic.
There is still plenty of room to cut rates; we expect the monetary policy stance to reach neutrality by the summer of next year.
There was much curiosity surrounding Christine Lagarde's first press conference following a meeting of the ECB's Governing Council. This was not so much over the tone of monetary policy—which followed the same lines as in Mario Draghi's era—but over how she would act in a fractured field where some did not welcome her.
A faster easing pace is warranted but Banxico is likely to remain overly cautious. No signs that Banxico is willing to speed up the long overdue easing cycle.
Overall, Mrs Lagarde’ first post-meeting press conference went as expected, with an outspoken communication style when talking about different issues not strictly related to monetary policy, and an unchanged line on the monetary policy stance.
As we expected, the Fed lefts its benchmark interest rate by unchanged at 1.5-1.75% and made only minor adjustments to the October statement.
Probability of recession in 12 months at one-year lows (30%). Financial conditions remain solid after Fed “mid-cycle” adjustment. Strong household finances supporting consumption.
The global slowdown extends into 4Q19, as some incoming figures continue to be weak despite a better tone on trade negotiations and lower brexit risks. Services and domestic demand continue to sustain growth while manufacturing and trade have stabilized in Q3, but confidence data for Q4 have been mixed so far.