Elections, global events to decide market direction

The Monetary Policy Review delivered no surprises, and that disappointed the stock market a little as optimists were looking for a rate cut. The central bank continued to speak of "calibrated tightening" but it will continue to inject liquidity through open market operations, by conducting bond buybacks. The SLR is also due for a cut in January. One negative for banks is the proposal that they must link floating rates to external benchmarks. Banks will, therefore, lose the leeway to fatten spreads on new mortgages.

The MPC forecasts inflation to remain subdued and sees some downside risks to growth. This is