Macro Minutes

Market pricing for central bank policy rates has been on wild ride. Front-end yield spiked to extreme levels during the initial phase of the oil shock. They are lower now but in some countries painting a very different picture than before the war started. Policy responses will not be uniform across countries but some central banks might be inclined to move pre-emptively while others could wait a lot longer. In episode we discuss why hikes could occur by mid-year in the UK & Europe while the BoC and Fed will be more patient and hold the line.
Participants:
Peter Schaffrik (Desk Strategy), Head of UK/European Rates & Economics
Blake Gwinn (Desk Strategy), Head of US Rates Strategy
Jason Daw (Desk Strategy), Head of North America Rates Strategy

* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

In this European episode of Macro Minutes, Peter is joined by Marc Sanchez who is RBC’s Head of European Financials Sector Strategy and recently wrote a detailed note about the private credit market and the potential pitfalls. Marc and Peter recap why markets have recently become wary of private credit, explore where the problems might lie and what potential contagion channels into the public markets exist.
Peter Schaffrik (Desk Strategy), Head of UK/European Rates & Economics
Marc Sanchez (Desk Strategy), Head of European Financials Sector Strategy

*Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

In this episode, we examine how the Middle East conflict transmits economic shocks beyond energy markets, focusing on supply chain disruptions in Asia-Pacific and global inflationary pressures. Join us when we explore why commodity exporters like Australia are feeling the pinch, how central banks will respond to stagflation, and why US equities have remained resilient , though caution is warranted as more significant market headwinds may be emerging.
Participants:
Peter Schaffrik (Desk Strategy), Head of UK/European Rates & Economics
Robert Thompson (Research), Australian Macro Rates Strategist
Izaac Brook (Desk Strategy), US Rates Strategy
Lori Calvasina (Research), Head of U.S. Equity Strategy

* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

The episode examines the Iran conflict through an emerging markets lens, analyzing recent developments and exploring two primary scenarios that could unfold in the coming weeks. The first scenario envisions rapid de-escalation that would allow oil prices to retreat toward $80 per barrel, providing relief to EM economies and supporting risk assets. The second scenario contemplates further escalation, potentially including boots-on-the-ground military intervention, which would keep oil prices elevated for an extended period. This sustained pressure would create headwinds for EM growth, inflation dynamics, and external balances. We assess the implications of each path for emerging market currencies.
Participants:
Luis Estrada(Desk Strategy), LATAM FX Strategist
Daria Parkhomenko (Desk Strategy), FX Strategist
Abbas Keshvani (Desk Strategy), Asia Macro Strategist

* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts

In this European edition of Macro Minutes, we discuss the rise in energy prices in the wake of the Middle East conflict brings back painful memories of the 2022 energy shock for Europe. We dissect what is similar and what is different, quantify some impacts on inflation and growth estimates, and map a path forward for the ECB and BoE.
Peter Schaffrik (Desk Strategy), Head of UK/European Rates & Economics
Cathal Kennedy (Desk Strategy), Senior UK Economist
George Moran (Desk Strategy), European Macro Strategist

* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts