No summer holidays for central banks. Last week brought further evidence that central banks have hit the pause button. The hold is either to assess
No summer holidays for central banks. Last week brought further evidence that central banks have hit the pause button. The hold is either to assess incoming data in a post-Brexit world or as a result of exhausted monetary policy. The net result is further risk -taking through wide spread carry trading. The Fed held policy unchanged and provided negligible evidence that September would be a “live” meeting. The BoJ continued conducting micro-tuning to current policy but efforts disappointed the markets which were expecting meaningful stimulus. This week, we anticipate the BoE will hold back from cutting rates as post-Brexit data is limited. Finally, the RBA is likely to cut rates in an effort to weaken AUD.
