4 Sep 2015
BoE policy meeting preview - less hawkish? - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank explained that this week ECB President Draghi stated that it was too early to conclude if the impact of slower growth in emerging markets would have a sustained affect on the Eurozone economy or whether the effects would be transitory.
Key Quotes:
"However, he left little doubt over the seriousness of the potential threat. Draghi predicted that the Eurozone economic recovery would continue at a slower pace reflecting the weaker EM economies. He made clear that the ECB would use all tools within its mandate if necessary to help support domestic growth and inflation and he underpinned a willingness to extend QE if necessary beyond September 2016."
"Next week the Bank of England has its opportunity to lay out how deeply it is concerned about the threat stemming from slower emerging market growth. We expect that the MPC voting pattern will remain the same as August with just McCafferty expressing a preference for an immediate rate hike.
As policy-makers evaluate the impact of slower growth in emerging market we see less risk of more hawks voting alongside McCafferty in the coming months. For now we maintain our forecast that the first BoE hike may come in May. However, currently there are risks of a later start to policy tightening."
Key Quotes:
"However, he left little doubt over the seriousness of the potential threat. Draghi predicted that the Eurozone economic recovery would continue at a slower pace reflecting the weaker EM economies. He made clear that the ECB would use all tools within its mandate if necessary to help support domestic growth and inflation and he underpinned a willingness to extend QE if necessary beyond September 2016."
"Next week the Bank of England has its opportunity to lay out how deeply it is concerned about the threat stemming from slower emerging market growth. We expect that the MPC voting pattern will remain the same as August with just McCafferty expressing a preference for an immediate rate hike.
As policy-makers evaluate the impact of slower growth in emerging market we see less risk of more hawks voting alongside McCafferty in the coming months. For now we maintain our forecast that the first BoE hike may come in May. However, currently there are risks of a later start to policy tightening."