Central banks back in centre stage – Rabobank
Analysts at Rabobank offered a brief overview of this week's key central bank meetings – the Bank of Japan on Tuesday, followed by the Bank of Canada on Wednesday and European Central Bank on Thursday.
“Central banks will be back in centre stage in the coming days. Despite widespread expectations that Japan’s Q4 GDP data will be heavily impacted by the consumption tax hike, several forecasters are anticipating that the BoJ could move towards a more hawkish position in the coming months. Although the country’s external sector was exposed to slowing growth in China last year, consumption data in Japan has been supported by strong employment. We see little risk that the BoJ will step away from its huge QQE policy in foreseeable future.”
“Steady rates are expected from the BoC on Wednesday and from the ECB on Thursday. Despite still soft Eurozone CPI inflation data, a modest improvement in the tone of economic releases in the region suggests there is reason pressure on the ECB for any urgent action. That said, we still see risk of further easing later this year.”