KEY THEMES
U.S. equities gained on Tuesday, after a choppy trading session. Furthermore, Brent oil prices are now near the USD90/bbl once more, as U.S. crude inventories gave signals of strong demand and a potential lack of supply.
Here at home, we have the Monetary Policy Committee (MPC) meeting tomorrow. The endless debates about the U.S. Federal Reserve next action have made the decision of every other central bank around the world even more delicate.
While the Fed’s March rate hike looks like a done deal, the CBE will likely kick off its first 2022 meeting with a cautious rate hold decision. However, we still think the CBE’s preemptive tightened monetary policy will begin in 2022 – most likely in H2 2022, given what seems a more-aggressive-than-expected hawkish Fed. The MPC heads into its first meeting in 2022 this Thursday with forward-looking expectations still anchored around its target. As a result, there is still room for the CBE to maintain its current monetary stance. For more details, please read our MACROView note published on 1 February 2022.