COLOMBIA: BBVA Forecast Consecutive and Bolder Rates Cuts In 2024
Dec-20 16:57
- As things stand, BBVA maintain their forecast of significant rate reductions in 2024, possibly at a greater pace than what was delivered yesterday and that will be accentuated after overcoming the greater uncertainty regarding inflation that will be concentrated at the beginning of 2024.
- Although BBVA’s expectation was for a greater reduction, BBVA highlight the change that the Board made in its vote, noting that 3 members changed their vote from stability to reduction confirming BBVA’s vision that the Bank will continue with a cycle of significant reductions in 2024.
- Although 25bp does not seem like a significant change as rates are at very high levels, it is a decision that, in the midst of widespread uncertainty about the economic environment and in particular the risks regarding inflation, marks a particularly important decision.
- BBVA consider that in a context of reduction of inflation and weakening of economic activity, this surely opens the door to a cycle of reductions that they hope will be more forceful in 2024, especially when the uncertainty around inflation clears, starting with the decision to increase the minimum wage.
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ITALY AUCTION PREVIEW: Exchange auction
Nov-20 16:45
- The MEF looks to sell up to E3bln of the 5.75% Feb-33 BTP (ISIN: IT0003256820) in an exchange operation on Wednesday 22 November.
The MEF looks to buy:
- 4.50% Mar-24 BTP (ISIN: IT0004953417)
- 1.75% May-24 BTP Short Term (ISIN: IT0005499311)
- 1.75% Jul-24 BTP (ISIN: IT0005367492)
- 3.75% Sep-24 BTP (ISIN: IT0005001547)
OPTIONS: Expiries for Nov21 NY cut 1000ET (Source DTCC)
Nov-20 16:39
- EUR/USD: $1.0850-60(E1.5bln), $1.0925-30(E750mln)
- GBP/USD: $1.2375(Gbp624mln)
- USD/JPY: Y149.00-20($2.5bln), Y149.50($1.5bln), Y151.00($1.3bln)
- AUD/USD: $0.6520-25(A$1.1bln)
GERMAN DATA: PPI Still Deflationary, But Negative Base Effects Wearing Off
Nov-20 16:35
German October Producer Prices came in broadly in line with forecasts at -11.0% Y/Y (-11.0% Y/Y consensus, -14.7% prior which was an all-time low) and -0.1% M/M (0.0% M/M consensus, -0.2% prior)
- This was the first time since August 2022 that the Y/Y reading was higher than the previous month, with negative base effects from high commodity prices a year earlier beginning to evaporate.
- The main driver for the decrease was energy (-27.9% Y/Y) - ex-energy, producer prices rose by +0.2% Y/Y.
- Intermediate goods prices also declined (-4.6% Y/Y), driven by metals (-11.7% Y/Y), which are energy-heavy in production, and chemical resources (-12.1% Y/Y).
- Categories which saw prices rise Y/Y included non-durable consumer goods (+3.9% Y/Y, driven by higher food prices at +3.7% Y/Y), durable consumer goods (+4.2% Y/Y, with Destatis noting a +4.8% rise in furniture prices) and investment goods (+4.4% Y/Y, driven by machine prices at +5.4% Y/Y).
- A continuing decline in producer prices is a sign that inflationary pressures on consumer prices will also keep ebbing.
- Bund futures saw some brief light support on the release, reversing lower soon after.
- Later this week, we get multiple further indicators of price pressures, including November flash PMIs and the November ifo Barometer.
