8 Jun 2015
Asian central bank activity this week – BBH
FXStreet (Edinburgh) - Researchers at BBH assessed their views on the central banks’ meetings ahead in the week.
Key Quotes
“Bank of Thailand meets Wednesday and is expected to keep rates steady at 1.5%”.
“We had thought there was a small chance of a dovish surprise, but recent official comments suggest those chances have gotten even smaller”.
“Last week, Finance Minister Phasee suggested that the current rate stance is already highly accommodative and that further easing is not necessary. This view is in line with recent comments by some central bank officials, including the Deputy Governor. We would not rule out resumed easing in H2 if the outlook worsens, however”.
“Bank of Korea meets Thursday and markets are split”.
“Of the 15 analysts polled by Bloomberg, 8 see a 25 bp cut to 1.5% and 7 see rates kept steady at 1.75%”.
“We lean towards a cut now, but if not, then the next cut will very likely be in Q3”.
“Price pressures are falling, while the real economy is softening”.
“We think the ultimate factor behind the next move will be the exchange rate. This latest leg lower for the yen has pushed the key JPY/KRW cross to new cycle lows near 8.80”.
Key Quotes
“Bank of Thailand meets Wednesday and is expected to keep rates steady at 1.5%”.
“We had thought there was a small chance of a dovish surprise, but recent official comments suggest those chances have gotten even smaller”.
“Last week, Finance Minister Phasee suggested that the current rate stance is already highly accommodative and that further easing is not necessary. This view is in line with recent comments by some central bank officials, including the Deputy Governor. We would not rule out resumed easing in H2 if the outlook worsens, however”.
“Bank of Korea meets Thursday and markets are split”.
“Of the 15 analysts polled by Bloomberg, 8 see a 25 bp cut to 1.5% and 7 see rates kept steady at 1.75%”.
“We lean towards a cut now, but if not, then the next cut will very likely be in Q3”.
“Price pressures are falling, while the real economy is softening”.
“We think the ultimate factor behind the next move will be the exchange rate. This latest leg lower for the yen has pushed the key JPY/KRW cross to new cycle lows near 8.80”.