April Global Macro Monthly - Central banks gauge lagged effects
- 26 April 2023 (7 min read)
Key points
- Market sentiment towards banks improved over the last month as deposit flight and emergency liquidity provision in the US stabilised. We await key central bank surveys to gauge the impact on credit conditions.
- Central banks return to face the previous dilemma: continue to tighten policy despite signs of economic resilience and inflation persistence or pause to see the lagged effect of previous actions.
- A spectrum of central banks emerges. The Bank of Canada announced a “conditional” pause, while several EM central banks delivered less explicit breaks.
- The Federal Reserve and Bank of England look set to tighten further, with European Central Bank hikes expected into Q3. The Bank of Japan also looks set to gradually undo easy policy.
- Higher rates also apply pressure to sovereign issuers. The US debt ceiling is likely to impact over the summer. But other sovereigns may soon face tougher conditions.
Related documents
Our experts and investment teams outline their key convictions.
Visit the investment instituteDisclaimer
This website is published by AXA Investment Managers Australia Ltd (ABN 47 107 346 841 AFSL 273320) (“AXA IM Australia”) and is intended only for professional investors, sophisticated investors and wholesale clients as defined in the Corporations Act 2001 (Cth).
This publication is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments, nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.
Market commentary on the website has been prepared for general informational purposes by the authors, who are part of AXA Investment Managers. This market commentary reflects the views of the authors, and statements in it may differ from the views of others in AXA Investment Managers.
Due to its simplification, this publication is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this publication is provided based on our state of knowledge at the time of creation of this publication. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.
All investment involves risk , including the loss of capital. The value of investments and the income from them can fluctuate and investors may not get back the amount originally invested.