Federal Funds Rate and ECB Deposit Rate Unlike the recent past, when inflation was high and interest rates were near zero, the Fed and ECB now have greater flexibility to cut rates if economic conditions worsen. Image: Deutsche Bank
Current Market Pricing for ECB’s Deposit Facility Rate The European Central Bank expects further rate hikes to fight inflation. Image: BofA Global Investment Strategy
Monthly Outperformance of NYFANG Over ACWI and ECB QE Total Is the shock of central bank tightening in Europe and Japan the most underappreciated risk this year? Image: BofA Global Investment Strategy
Central Banks – Quarterly Pace of Fed, ECB, BoJ, BOE Net Purchases (Quantitative Easing – QE) The pace of global central bank purchases is expected to turn negative in Q1 2022. Image: BofA Global Research
U.S. Dollar and Federal Reserve – ECB Shadow Rate Spread Is the U.S. dollar finding a support, as it tends to track the Fed – ECB shadow rate spread? Image: Arbor Research & Trading LLC
Proxy for ECB Market Pricing Points to Negative Rates for Years to Come Markets are pricing in negative rates in Europe until 2029. Image: Deutsche Bank
ECB Staff Forecasts on Inflation How much trust should investors have in the ECB’s inflation forecasts? Image: Deutsche Bank
Fed vs. ECB Balance Sheet This chart puts the Fed vs. ECB balance sheet into perspective. Image: J.P. Morgan
ECB Balance Sheet, with Forecast Until End-2021 The ECB’s balance sheet is expected to expand further and hit 62% of GDP in 2021. Image: UBS
Global PMI Manufacturing and Rolling Yearly Change in the Balance Sheet (FED, ECB, BoJ, PBOC) This chart shows the correlation between the change in global liquidity and the global PMI manufacturing. Image: Swedbank Research
QE in 2020 and Central Banks (the Fed, ECB and BoJ) Central banks’ QE should support financial markets next year. Image: Gavekal, Macrobond