Daily Commentary BY THE CURVE TEAM –

Monetary Policy Outlook Around The Globe In Focus

19th of February, 2019

Although the past 24 hours has been largely quiet with little major data releases and the US markets contained on the President’s Day holiday, the monetary policy outlook for the major central banks remains in focus.

It kicked off with ECB officials adding to existing uncertainty over the Eurozone outlook when ECB’s Villeroy responded to questions about the ECB’s plan for future rate hikes, where he stated that:

“The key question will be if the slowdown is temporary — with a bounce-back during this year — or more durable.”

The doubt over Europe’s monetary policy outlook continued this morning with ECB’s Chief Economist stating that while growth is expected to pick back up, it’s “too early to say by how much”.

Shifting to the US central bank, it will be interesting to see how the Fed responds to the sharp pullback in December’s retail sales in their meeting on Thursday morning (local time). It is likely that they will continue their “wait-and-see” approach as these soft figures represent a blip in the midst of largely sound US data.

Locally, we have the RBA minutes set to be released at 11:30am today, but we aren’t likely to hear anything we haven’t already heard in Governor Lowe’s speech and the SoMP. However, with key wage price and employment data being released over the next two days, Lowe’s parliamentary testimony on Friday should give a more revised indication of the monetary policy outlook.

Neyavan Suthaharan

Client Services Officer