Euros,
U.S.
dollars,
Canadian
dollars,
Russian
rubles
and
Czech
korunas
lie
on
a
table
as
banknotes.
Picture
Alliance
|
Picture
Alliance
|
Getty
Images
As
inflation
loosens
its
grip
in
most
economies,
investors
are
closely
monitoring
interest
rate
decisions,
with
markets
expecting
a
slew
of
rate
cuts
this
year.
While
rates
in
most
economies
are
set
to
remain
elevated
in
2024,
economists
expect
a
mild
rollback
late
this
year,
the
Economist
Intelligence
Unit
said
in
a
recent
report.
Most
central
banks
sharply
hiked
policy
rates
from
early
2022
in
a
bid
to
stifle
inflation.
China
and
Japan
remain
exceptions
in
the
global
tightening
cycle,
though
Beijing’s
rates
have
started
to
ease
slightly,
said
the
global
intelligence
firm.
EIU
also
expects
the
Bank
of
Japan
will
exit
its
negative
interest
rate
policy
in
the
second
quarter.
United
States
Euro
zone
The
central
bank
acknowledged
that
inflation
was
easing
faster
than
it
anticipated
and
lowered
its
annual
inflation
forecast
from
an
average
of
2.7%
to
2.3%.
The
ECB
has
a
2%
inflation
target.
Switzerland
Swiss
inflation
in
February
rose
1.2%
from
a
year
ago,
the
lowest
reading
in
almost
two
and
a
half
years,
fueling
hopes
that
the
Swiss
National
Bank
could
trim
interest
rates
in
its
March
21
meeting.
The
SNB’s
current
policy
rate
stands
at
1.75%,
and
the
central
bank
has
an
inflation
target
range
of
between
0%
and
2%.
According
to
LSEG,
there’s
a
more
than
40%
chance
of
a
25-basis-point
cut
in
March,
which
would
take
the
SNB’s
key
rate
down
to
1.5%.
UBS
expects
the
SNB
to
wait
until
the
second
quarter
for
its
first
key
interest
rate
cut,
while
not
ruling
out
the
possibility
of
a
cut
this
month.
Bank
of
Canada
Turkey
Turkey’s
central
bank
kept
its
interest
rate
steady
at
45%
in
February,
ending
its
tightening
cycle
after
eight
straight
hikes,
with
many
expecting
it
to
hold
for
most
of
2024.
The
country’s
inflation
currently
stands
at
around
65%.
JPMorgan
said
in
a
research
note
that
the
Turkish
central
bank
may
cut
its
policy
rate
in
November
and
December,
keeping
its
year-end
policy
rate
forecast
of
45%.
Australia
In
a
recent
note,
ANZ
noted
that
Australia’s
economy
experienced
a
“continued
slowdown”
in
the
second
half
of
2023
as
fourth-quarter
GDP
grew
just
0.2%
from
the
prior
quarter.
That
comes
after
third-quarter
GDP
edged
0.3%
higher
from
the
previous
three-month
period.
New
Zealand
Auckland
Savings
Bank
does
not
expect
the
RBNZ
to
start
cutting
the
cash
rate
until
November.
Indonesia
Indonesia’s
central
bank
kept
its
benchmark
policy
rate
at
6%
in
its
recent
meeting.
While
the
Southeast
Asian
nation’s
consumer
price
inflation
is
now
within
the
Bank
Indonesia’s
targeted
range
of
1.5%
to
3.5%
for
the
year,
Indonesia’s
central
bank
governor
is
considering
a
75
basis
point
cut
only
in
the
second
semester
of
the
year.
“We
are
still
watching
closely
is
about
the
global
spillover…
mainly
of
the
impact
of
U.S.
monetary
policy
direction,”
Bank
Indonesia
governor
Perry
Warjiyo
recently
told
CNBC’s
JP
Ong.
BMI,
a
Fitch
Solutions
research
unit,
expects
the
bank
to
lower
the
benchmark rate
to
5%
by
the
end
of
2024,
starting
in
the
second
half
of
the
year
in
tandem
with
the
U.S.
and
other
developed
market
central
banks
“in
order
to
not
raise
undue
depreciatory
pressures
on
the
Indonesian
rupiah.”
Bank
of
Japan
Unlike
its
peers,
economists
expect
the
Bank
of
Japan
to
raise
interest
rates
this
year
instead
of
cutting.
The
BOJ
is
expected
to
move
toward
ending
its
negative
interest
rate
policy
by
April,
contingent
on
annual
wage
negotiations,
said
economists
at
Oxford
Economics
and
Macquarie.
Spring
wage
negotiations
are
an
important
factor
in
whether
Japan’s
inflation
has
sustainably
met
the
BOJ’s
2%
target,
a
prerequisite
for
the
BOJ
to
end
its
negative
rate
policy.
South
Korea
The
BOK
could
still
be
one
of
the
first
in
Asia
to
cut
rates,
said
Goldman
Sachs
senior
Asia
economist
Goohoon
Kwon,
citing
ongoing
disinflation
and
subdued
private
consumption.
A
strong
rebound
in
exports
driven
by
semiconductors
due
to
the
advent
of
AI
will
allow
the
BOK
to
be
less
constrained
by
U.S.
monetary
policy
and
inflation,
Kwon
said.
So
who’s
first?
“The
Bank
of
Canada
is
my
candidate
to
be
the
first
to
cut,”
Carl
Weinberg,
chief
economist
at
High
Frequency
Economics
told
CNBC.
He
explained
that
Canada’s
CPI,
excluding
shelter
prices,
is
rising
by
just
1.7%.
That’s
below
the
central
bank’s
inflation
target
and
Weinberg
noted
that
all
the
prices
the
BOC
can
control
in
the
economy
are
rising
less
than
the
inflation
target
mandates.
“2024
will
be
the
year
of
the
rate
cut
pivot,”
Weinberg
added.
But
Asian
central
banks
are
unlikely
to
cut
ahead
of
the
Fed
as
a
strong
U.S.
dollar
means
that
most
Asian
currencies
remain
relatively
weaker,
said
Morgan
Stanley.
The
potential
for
further
depreciation
could
still
lend
some
higher
inflation
risks
to
these
countries,
the
investment
bank’s
economists
said
in
a
report.
“While
inflation
is
coming
off,
in
most
of
the
region’s
economies
it
has
either
just
reached
the
target
range
or
is
still
closing
the
gap
to
target
range,”
Morgan
Stanley
said.
