GLOBAL MACRO: IMF Sees Mild Fiscal Tightening Ahead After Easier 2025 [1/2]
Oct-17 14:04
- This week’s IMF Fiscal Monitor (link) points to marginal global fiscal tightening in the next two years after what is viewed as sizeable loosening this year.
- We specifically refer to forecasts changes in the cyclically adjusted primary balance, with it being a crude impulse as it doesn’t allow for fiscal multipliers.
- On aggregate, this projected expected mild tightening ahead after estimated sizeable loosening this year is an EM rather than DM story, with easier 2025 fiscal policy seen with ~2pps of GDP easing in both China and Brazil (not shown below). Brazil then plays a large role in the expected tightening over the next two years, worth 1-1.5pp vs 0.2pp for each of the next two years for the overall EM category.
- DMs meanwhile are seen with no real change in outlook, tightening 0.1pp in 2025 and 0.1pp in 2026 before a flat 2027.
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IMF: NY Post-Bessent Chief Of Staff Set To Become Seniormost US Off. At IMF
Sep-17 13:57
The New York Post reports that, according to its sources, US Treasury Secretary Scott Bessent's chief of staff, Dan Katz, is set to leave the administration to take up the post of first deputy managing director of the International Monetary Fund (IMF). Speaking on the sidelines of the IMF and World Bank spring meetings in Washington, D.C., earlier this year, Bessent criticised both organisations, claiming that “mission creep has knocked these institutions off course".
- Bessent argued the IMF has the mission of "promoting global monetary cooperation and financial stability", but instead is focused on progressive social issues. Bessent: "The IMF and World Bank serve critical roles in the international system. And the Trump Administration is eager to work with them — so long as they can stay true to their missions.”
- If appointed, Katz would become the seniormost US official at the IMF, second only to Managing Director Kristalina Georgieva. Historically, the IMF has always been led by a European, while an American has served as president of the World Bank, although this is not a formalised split. The appointment of a senior Trump administration figure to such an influential role at the IMF would draw attention towards the global lender of last resort.
EUR: EURCAD hits a fresh 16yrs High
Sep-17 13:56
- Just a 19 pips swing for now in the USDCAD, initially fell but remains fairly close to where it trading at pre decision.
- The one to watch is the EURCAD that did managed a new 16yrs high, highest since July 2009.
- Immediate resistance is still right here at 1.6330, this was the June and July 2009 highs.
(Chart source: MNI/Bloomberg Finance LP).
BOC: Statement Comparison - Sept 2025 Vs July 2025
Sep-17 13:49
A comparison of September's rate announcement vs prior (July) in link below:
