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Release Spotlight – Central Banks

In this week´s release spotlight we dive into some key data releases related to central banks in Europe and Latin America. 

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Monday, October 26th

After stagnating for a few years, credit growth has picked up again in 2020.

In emerging markets like Brazil one can see the increase in the money supply in 2020. As the monetary base increased, so did broader monetary aggregates.

In Turkey there was a huge confidence shock in the beginning of the year. Now, it looks like the confidence is coming back, but question is how the second wave of the Corona virus will effect this.

Tuesday, October 27th

M3 has started to increase again after being flat for a few years. Due to the pegged exchange rate, the Danish Central Bank has to follow the expansionary policies of the ECB.

Even as interest rates have gone down, the spread has stayed relatively constant.

While bank interest rate margins are somewhat lower than in previous years, they do not seem to be that affected by Central Banks’ low interest rate policies.

Monetary aggregates are increasing as the ECB continues with its asset purchasing programs.

Wednesday, October 28th

Emerging Markets also display the long run decline in nominal interest rates, case in point, Brazil.

Thursday, October 29th

It is very unlikely that the ECB will change policy rates and go more negative. Any addition to its policy tools will come via increased asset purchases (QE).

Friday, October 30th

Adverse structural factors like demographics combined with very weak aggregate demand have shaved off an entire percentage point of the long run growth forecast since the mid-2000s.
Expect this to decline further!

Expect the long-run estimate for the unemplyoment rate to incease amidst weak economic growth. 

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