In today’s briefing:
- After the Rally. What Next for the Hong Kong Market?
- Sweden Policy Rate 3.25% (consensus 3.25%) in Sep-24
- Forceful Fed Rhymes From 1998
After the Rally. What Next for the Hong Kong Market?
- The fabled PBoC Put is finally out in the open
- Is there a floor under the stock market, if not the property market?
- Has the asymetric opportunity now gone with this recent rally?
Sweden Policy Rate 3.25% (consensus 3.25%) in Sep-24
- The Riksbank cut its policy rate by 25 basis points to 3.25%, in line with consensus, and signaled potential further cuts at a faster pace if inflation and economic activity remain stable.
- Future rate cuts are likely, with two more reductions expected in 2025, contingent on sustained favourable inflation developments and improved economic activity.
- Uncertainty remains due to geopolitical risks, global economic conditions, and energy price volatility, which could alter the trajectory of monetary policy adjustments.
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Forceful Fed Rhymes From 1998
- The Fed’s 50bp rate cut was remarkably forceful relative to the resilient data. It relies on rates being far above their neutral setting despite no evidence for this tightness.
- Historical parallels to 1998 are mounting with the forceful start and conveniently timed political support. A repeat would mean an early pause and hikes returning in 2025.
- Brazil has tracked a year ahead of the Fed in the last hiking and cutting cycles. Its latest hike would also be consistent with the Fed following the 1998 scenario.
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