Monetary

• A new study examines the "added-worker effect," where households increase labor supply during economic downturns to compensate for lost income and security. • Research indicates that recessions can lift married women’s labor-force participation by approximately 0.93 percentage points as secondary earners enter the market. • The findings highlight a critical causality gap, suggesting that labor responses may be a form of household self-insurance rather than a direct result of central-bank monetary tightening.

• The European Central Bank (ECB) reported monetary developments for the euro area as of June 2026. • Data shows a divergence in deposit growth, with household deposits slowing to a 2.6% annual growth rate from 2.8% in May. • Conversely, deposits from non-financial corporations saw an increase in their annual growth rate, rising to 5.3% in June from 4.2% in May.

• The Bank of England's Monetary Policy Committee (MPC) is implementing quantitative tightening (QT) to reduce the amount of money in the economy. • At its September 2025 meeting, the MPC announced plans to reduce its asset holdings by an additional £70 billion through the sale of government bonds. • This strategy reverses previous quantitative easing (QE) measures, where the Bank created electronic money to purchase financial assets.

• The Federal Reserve Board of Governors has established five new task forces dedicated to analyzing and improving the conduct of monetary policy. • Key focus areas include refining policy communications during uncertainty, evaluating the costs and benefits of the current balance sheet regime, and enhancing the timeliness of economic data. • These initiatives matter as they aim to strengthen the quality of real economic signals and institutional frameworks that inform critical policy judgments.

• Federal Reserve Chairman Warsh appeared before the U.S. House Committee on Financial Services to deliver the semiannual Monetary Policy Report. • The testimony serves as a formal requirement under the Federal Reserve Act, ensuring transparency between the central bank and Congress. • This appearance allows the Federal Reserve to outline its current economic outlook and justify its strategic decisions regarding interest rates and monetary stability.

• The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has formally backed the development of the digital euro. • This initiative represents a strategic shift for the EU, expanding the concept of "strategic autonomy" beyond defense and energy to include critical financial infrastructure. • The move is designed to ensure Europe's monetary sovereignty and financial autonomy in an increasingly interconnected global digital economy.

• The European Central Bank (ECB) is examining the intersection of artificial intelligence and monetary policy to maintain price stability within the euro area. • A 2025 IMF working paper by Bogmans et al. highlights the significant energy demands of the AI industry, particularly in the United States. • Simulations from the report suggest that US electricity prices could rise by 8.6% by 2030 as a direct result of AI-driven power consumption.

• Voters in Johor will head to the polls on July 11, with Pakatan Harapan and Barisan Nasional competing across all 56 state constituencies to form the next state government. • The election is viewed as a critical test for the partners in the current federal government as they face off in a head-to-head battle for regional control. • Bank Negara Malaysia will announce its Overnight Policy Rate decision this Thursday following the Monetary Policy Committee meeting.

• The European Central Bank (ECB) reported monetary developments for the euro area for May 2026, focusing on M3 deposit growth. • Annual growth for deposits held by households remained steady at 2.9%, while deposits from non-financial corporations rose to 4.2% from 3.8% in April. • These figures are critical for the ECB's primary mission of maintaining price stability and preserving the purchasing power of the euro.

• Researchers at Liberty Street Economics analyzed the resilience of emerging market economies (EMEs) during the U.S. monetary tightening cycle of 2022-23. • The study found that EMEs generally performed better in financial markets than predictive models suggested, with "more vulnerable" economies showing the most significant outperformance. • Economic activity results were mixed: vulnerable economies exceeded expectations, while less vulnerable economies performed worse than predicted.

• The European Central Bank (ECB) is monitoring liquidity conditions and monetary policy operations for the period between 11 February and 5 May 2026. • An increasing number of banks are currently testing their participation viability to ensure operational readiness for these specific operations. • This trend is driven by the ongoing contraction of the Eurosystem's balance sheet, which necessitates that banks have reliable access to liquidity.

• The Federal Open Market Committee (FOMC) maintained the target federal funds interest rate in the 3.50%-3.75% range during its June 17 meeting. • This decision aligns with investor expectations as the Federal Reserve seeks to balance the containment of inflation with the need to support labor markets. • Fed policy is critical because it directly influences borrowing costs, savings returns, and general financial conditions across the U.S. economy.

• Indian stock market indices climbed in early trade on Friday, with the BSE Sensex rising 269.93 points to 74,629.94 and the NSE Nifty increasing by 62.4 points to 23,478.95. • The upward movement comes as investors position themselves ahead of the Reserve Bank of India's (RBI) upcoming monetary policy decision. • This activity reflects market anticipation regarding potential interest rate changes or policy shifts that could impact economic growth and liquidity.

• The European Central Bank (ECB) reported monetary developments for the euro area as of April 2026, focusing on M3 deposit growth. • Annual growth for household deposits remained steady at 2.9%, while deposits from non-financial corporations slowed to 3.8% from 4.2% in March. • These figures are critical for the ECB's primary mission to maintain price stability and preserve the purchasing power of the euro.

• India's Reserve Bank of India began its 3-day monetary policy meeting on April 7th, with the decision scheduled for announcement on April 8th, affecting regional market sentiment. • A CNBC TV18 poll indicates market consensus expects no change to repo rates in the upcoming policy decision, suggesting the RBI will maintain its current monetary stance. • The policy meeting comes amid mixed signals from Indian corporate earnings, with HDFC Bank reporting business growth above expectations while Kotak Mahindra Bank fell short.