The U.S. Federal Reserve, the Bank of England, the European Central Bank and the Bank of Japan all left their main policy rates unchanged due to growth concerns stemming from global uncertainty. The Fed suggested policymakers would consider adjusting the reduction of the bank’s bond portfolio if warranted by economic conditions, while the BoE scaled back the number of increases in borrowing costs required to meet the government’s inflation target. The ECB pledged to continue reinvesting principal payments from maturing securities purchased under the asset purchase problem for as long as necessary, and the BoJ committed to continuing to purchase Japanese government bonds, ETFs and Japanese real estate investment trusts.
Meanwhile, the UK parliament voted down another proposal to allow it to extend the March 29 Brexit deadline in the event of a no-deal Brexit, bringing it closer to the worst-case Brexit scenario. The global economy might be at an inflection point as opposed to knocking on recession’s door, according to RBC Global Asset Management, while Aberdeen AM assesses that China’s current slowdown may be bottoming out. Moody’s Investors Service estimates that global green bonds issuance will grow by 20% in 2019 to reach USD 200 billion, an assessment contrasting with that from S&P Ratings suggesting a more modest growth forecast of 8% to USD 180 billion.
Ekonamik takes a look at whether frontier markets are worth the risk considering the recent disappointing performance of emerging markets and analyses the eurozone’s difficult in the year ahead based on severe slowdowns in several large European economies, including the recession in Italy.
The Week Ahead:
The seventh week of 2019 will be dominated by sovereign debt issuance and the publication of consumer price inflation figures across the world.
The Eurogroup will also meet on Monday to review conditions in Ireland and Portugal and to elect a new member of the ECB Executive Board to succeed Peter Praet. Among monetary policymakers, Riksbanken, the central bank of Sweden, will hold its first meeting and is expected to make no changes to the Swedish policy rate. The week will conclude on Saturday with a general election in Nigeria.
See the full calendar here.