Core Viewpoint - The global trend of monetary policy easing is nearing its end, with developed economies showing a clear trend of "braking" in their monetary policies, leading to increased uncertainty in the markets for the upcoming year [1]. Group 1: Central Bank Decisions - The Bank of Japan (BOJ) is expected to raise its benchmark interest rate to 0.75% in its upcoming meeting, marking its first rate hike since January [2]. - The Bank of England (BOE) is anticipated to lower interest rates, which may be one of the last moves in its current easing cycle, indicating a shift in its policy focus [3]. - The European Central Bank (ECB) is expected to maintain its current interest rates, with market attention on any hints of a potential shift towards tightening [3]. Group 2: Divergence in Monetary Policies - Developed economies are gradually halting their rate cuts, while emerging markets continue to pursue easing measures, creating a complex global monetary policy landscape [6]. - In Asia, the Bank of Thailand is expected to cut rates, while there is uncertainty regarding the Bank of Indonesia's actions [6]. - In Latin America, central banks in Chile and Mexico are expected to lower rates, contrasting with Colombia's decision to maintain its rate due to better-than-expected inflation reports [6]. Group 3: Future Implications - The divergence in monetary policies is likely to reshape global capital flows and asset pricing, with the potential for the U.S. Federal Reserve to find itself acting alone if it continues to cut rates while others do not [1][4]. - The anticipated continued easing by the Federal Reserve may lead to a depreciation of the U.S. dollar, especially as other central banks maintain or increase their rates [7].

Group 1 - The central banks are expected to maintain a cautious approach towards interest rate decisions, with the Federal Reserve unlikely to implement significant rate cuts despite political pressure [1][2] - The market anticipates a potential resumption of the Fed's rate-cutting cycle in September, but the extent of any cuts is expected to be limited to 25 basis points rather than 50 [2] - The Reserve Bank of New Zealand is projected to cut rates by 25 basis points, aligning with market expectations, and is expected to conclude its current easing cycle after November [3] Group 2 - Fitch Ratings indicates that Indian companies are not significantly impacted by U.S. tariffs, but sectors like pharmaceuticals may face increased pressure due to secondary effects of tariffs [4] - If the U.S. maintains higher tariffs compared to other Asian markets, it could pose moderate downside risks to India's projected economic growth rate of 6.5% for FY2026 [4] - The potential for over-supply shifts towards India due to U.S. tariffs could lead to a decrease in domestic prices for products like steel and chemicals, creating a ripple effect in the market [4]