PERU: BBVA and Pantheon On BCRP Decision
Jul-14 11:23
- BBVA: The statement suggests a prudent attitude on the part of the Central Bank in an environment of high uncertainty (lagged impacts of the drought at the end of last year and the high prices registered by fertilizers and El Niño). BBVA see a Central Bank that does not want to rush into the start of the cycle of policy rate cuts, something that is consistent with what their authorities have been reporting.
- This reinforces BBVA’s forecast that the first rate cut will not happen in the very short term, but rather, with the information available right now, the most likely scenario remains that that first cut will take place in October. The reference rate would stand at 7.25% at the end of 2023.
- Pantheon still believe that the Bank will be able to adopt a dovish tone soon, as inflation will continue to fall rapidly over the coming months. The headline rate is now at its lowest level since February last year. Favourable base effects, stiflingly high real rates—at around 4%, the highest in about two decades, and well above the 1.5% neutral rate—and the supportive PEN, all will help to push inflation down in the near term. Most importantly, the case for the Bank to reduce pressure on the economy will continue to grow, and rapidly.
- Pantheon look for rate cuts from September or October, with the main rate ending the year at around to 6.5%, assuming no external and domestic shock to prices. Admittedly, the risk of El Niño over the coming months is increasing, which could easily limit the downshift in inflation via higher food prices, and delay the start of the easing cycle to late Q4.
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EU: MEPs Vote In Favour Of AI Act Proposal, Final Tripartite Talks Start Today
Jun-14 11:08
By a margin of 499 to 28 (with 93 abstentions) members of the European Parliament have approved a Commission proposal for the regulation of artificial intelligence (AI), setting up more extensive negotiations to take begin today on the draft AI Bill between MEPs, the Commission and member state representatives.
- Brussels-based journalist Rosie Birchard: "EU Parliament adopts position on AI act — final talks on first-of-their-kind rules to regulate artificial intelligence start today. Sticking points: Parliament wants to ban remote real-time biometric identification; member states will likely seek law enforcement exceptions."
- The regulation and development of AI is set to become a major political and economic touchpoint around the globe in the coming months and years. A broad view among many observers is that the US approach could see regulation be too lax, exacerbating risks, while the EU could prove too stringent thereby stifling innovation. The UK has sought to position itself as a 'Goldilocks' middle ground between the two, but it remains unclear whether it will gain the backing of political leaders in Washington and Brussels to lead global regulation on the issue.
US MBA: REFIS +6% SA; PURCH INDEX +8% SA THRU JUNE 9 WK
Jun-14 11:00
- US MBA: REFIS +6% SA; PURCH INDEX +8% SA THRU JUNE 9 WK
- US MBA: UNADJ PURCHASE INDEX -27% VS YEAR-EARLIER LEVEL
- US MBA: 30-YR CONFORMING MORTGAGE RATE 6.77% VS 6.81% PREV
MNI: US MBA: MARKET COMPOSITE +7.2% SA THRU JUN 09 WK
Jun-14 11:00
- MNI: US MBA: MARKET COMPOSITE +7.2% SA THRU JUN 09 WK
