BofAML: Sobre Janet Yellen y la flexibilidad (Global Economic Weekly)

Redacción - Viernes, 23 de Septiembre

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Global Economic Weekly: Janet is not a gymnast
•   As expected the Fed remained on its super-cautious path and the BOJ delivered a roughly neutral new package.
•   Central bank critics suggest a bewildering array of roadblocks and constraints on further policy easing.
•   In reality many concerns can be put to rest if they achieve their core objective: hitting or overshooting inflation targets.

Global: Janet is not a gymnast

As expected the Fed remained on its super-cautious path and the BOJ delivered a roughly neutral new package. Central bank critics suggest a bewildering array of roadblocks and constraints on further policy easing. In reality many of these concerns can be put to rest if they achieve their core objective: hitting or overshooting their inflation targets.

United States: What does the "shadow PMI" say?

We decompose the manufacturing ISM into two key drivers: factory activity and sentiment. The latter accounts for roughly half of the decline in the ISM in 2015. Although we don't have enough data to analyze the August ISM decline, sentiment may have been a factor, given elevated policy uncertainty. In addition to sluggish factory activity, sentiment could continue to restrain the ISM below the 50 breakeven level.

Euro Area: ECB - Be careful with the read-across from BoJ

We have received questions on whether the ECB can emulate the BoJ's latest policy move. A 10y bond yield target in the euro area would be tricky to implement from a technical and political perspective, we think. A commitment to inflation target overshooting is a much lower hanging fruit, but this is still not in close reach.

Asia: RBI: Little incentive to depreciate

The RBI has little incentive to weaken INR as weak exports reflect slow global growth. Weak INR could prove inflationary. This could lead to debt FPI pullout during FCNR payout.

Emerging EMEA: raising the OPEC meeting stakes

OPEC meeting newsflow confirms our view that Saudi Arabia's energy policy is likely to become less aggressive given increased macro strains. Serious negotiations are likely underway, but challenges abound. Potential supply shocks increase the incentives to reaching an agreement to support oil prices

Latin America: mixed emotions

We expect regional real GDP growth to recover in 2017 from the low levels of 2016. Risks remain to the downside. We expect Peru to outperform. We estimate 1% contraction in 2016 and 2% growth in 2017 for the region. We are more constructive than the consensus on Brazil and less so on Mexico and Peru.

UK: sterling work

Sterling's depreciation is beginning to show up in prices early in the supply chain. Higher consumer price inflation is on the way. But exchange rate passthrough is taking a little longer than we expected, so we cut our 2017 CPI inflation forecast to 2.2% from 2.6%.

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