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CEE: Romania - NBR goes tighter but more will be needed soon (Martin Ertl)

13 Nov

Martin Ertl

NBR keeps monetary policy rate unchanged at 1.75 % but narrows the interest rate corridorSeptember inflation is driven by volatile food prices, the monetary policy relevant core inflation increased only moderately.Strong economic growth and tight labor market conditions will require the NBR to act soon. The National Bank of Romania (NBR) has kept its monetary policy rate unchanged at 1.75 %. By narrowing the corridor around the monetary policy rate from +/- 1.25 to +/- 1 %-points the NBR continued its gradual monetary policy normalization. The deposit facility rate was raised to 0.75 % while the lending facility rate was lowered to 2.75 %. The NBR’s interest rate corridor bounds overnight interbank rates, which are highly correlated with longer maturity interbank rates. The 3 months ROBOR, as the ma...     » Weiterlesen


 

CEE: Serbia - Inflation has been well anchored and growth picked up in Q3 (Martin ...

13 Nov

Martin Ertl

Inflation has been well anchored and growth picked up in Q3 while the real yield in Serbia is already very low.At the monetary policy meeting that took place last on Thursday 9th November, the executive board of the National Bank of Serbia (NBS) decided to keep the key policy rate on hold at 3.5 %. Previously, the NBS had lowered the policy rate twice this year by 25 basis points in September and October. The executive boards assessed that inflationary pressures remain low. In September, the inflation rate was 3.2 % (y/y) and lower than previously expected. The drought effects on food prices were weaker than expected. In addition, domestic inflation expectations seem to adjust to a lower level (Figure 4).The real, inflation-adjusted interest rate has also reached a low (< 1 % on average) this year. The ...     » Weiterlesen


 

Czech Republic - key interest rate increased by 25 basis points to 0.5 % (Martin E...

07 Nov

Martin Ertl

The Czech National Bank has increased its key interest rate by 25 basis points to 0.5 %.The corridor around the key rate was expanded to 95 basis points, keeping the discount rate unchanged at 0.05 %.Tighter monetary policy reflects a booming Czech economy with unemployment at its pre-crisis low.EUR/CZK exchange rate poses risk to the CNB’s inflation path. Last Thursday (November 2nd) the Czech National Bank (CNB) took the next step towards monetary policy normalization by increasing the 2-week repo rate by 25 basis points to 0.5 %. The interest rate corridor was expanded to 95 basis points by keeping the discount rate unchanged at 0.05 % and increasing the Lombard rate by 50 basis points to 1 %. The rate hike was in-line with market expectations and the CNB’s forward guidance.In August 2017, t...     » Weiterlesen


 

Solid Q3 GDP released last week for Austria and the total of the Euro Area (Martin...

07 Nov

Martin Ertl

Solid Q3 GDP released last week for Austria and the total of the Euro Area.The conditions in the Austrian labor market keep improving amid the sound business cycle.The Austrian economy continues a strong growth trajectory. According to the flash estimate from the Austrian Institute of Economic Research (Wifo), real GDP increased by 0.8 % (q/q) in the third quarter after it had expanded by 0.9 % quarterly in H1 2017 (trend business cycle component). In seasonally and working day adjusted terms (Eurostat), the quarterly increase in GDP was 0.6 % in Q3. The recovery is broad based across expenditure components. Both household consumption (0.4 % q/q) and fixed investment (07 %) as well as net exports make the economy grow. Exports and imports rose by 0.8 % each in Q3. In annual terms, GDP expanded by 2.6 % aft...     » Weiterlesen


 

ECB continues a gradual path of monetary policy normalization (Martin Ertl)

03 Nov

Martin Ertl

EurozoneECB continues a gradual path of monetary policy normalization by extending QE at a slower pace.If the Euro Area economy evolves along the lines projected, the begin of an interest rate hiking cycle is likely in 2019.At the governing council (GC) meeting on Thursday last week, the European Central Bank left the interest rates on the main financing operations, the marginal lending facility and the deposit facility unchanged at 0.0 %, 0.25 % and -0.4 % respectively. In the pivotal forward-looking statement (“forward guidance”), the GC says that it “continues to expect the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases.” The phrase was unchanged from the previous GC statement. As broad...     » Weiterlesen


Martin Ertl

Chief Economist, UNIQA Capital Markets GmbH

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