Wednesday, October 7, 2015

Hikes at key Central Banks set back - Nomura

FXStreet (Guatemala) - Analysts at Nomura explained that a three-month delay to their forecast for the first Fed hike drives a similar shift in our BoE forecast to May 2016.

Key Quotes:

"With such delays driving the neutral rate lower, in our view, a long dovish tail risk remains in our forecast. The shift in our mean BoE forecast is relatedly smaller, at -7bp by December 2016.

"The UK economic cycle remains advanced, and this should continue adding inflationary pressure. A weaker outlook for China does not derail this forecast, albeit with some weight being imported indirectly from the US and euro area.
 We continue to hold high conviction in UK shorts on a cross-market basis, while on an outright basis bear (bond) risks are building even as the market increasingly dismisses them. Flatteners look strong risk/reward here."
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