Bumper July jobs data from the United States have again begun to stoke expectations of a September rate hike from the Federal Reserve, just when other major central banks around the globe are unleashing ever-looser policy.
That slightly more positive tone may linger as a backdrop for the global economy in the coming week, with growth data due for the euro zone, Germany and Italy, along with key releases on inflation, industrial production and retail sales in China.
New Zealand’s central bank is also expected to join the easing brigade with a cut on Thursday. [NZ/POLL]
In the past week, the Bank of England fired its first post-Brexit salvo – cutting Bank Rate to a new record low of 0.25 percent while also reigniting its asset purchase program – and hinted further easing was in the pipeline.
Governor Mark Carney said he had unveiled an “exceptional package of measures” because the economic outlook had changed markedly following the June Brexit vote. The Bank expects the economy to stagnate for the rest of 2016 and suffer weak growth next year.
Slow growth and virtually non-existent euro zone inflation will also force the European Central Bank to extend and expand the scope of its asset purchase program, a Reuters poll of economists showed last month.