Nov 5
UK: CPI and BOE policy- EUR/GBP at six month high
GBP continues to underperform pressured by speculation that the BOE will maintain its accommodative policy longer than other G-7 central banks and may elect to expand quantitative ease if inflation continues to decline. GBP has also been pressured by concern about rising UK government debt as the UK increased spending to try and boost the UK economy. UK GDP debt ratio is approaching 57%. The Center for Economics and Business Research (CEBR) says that the BOE may keep interest rates at the
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Nov 5
ECB: Preview October Rate Decision
Rate decision due at 1245 BST with the press conference to follow at 1330 BST Birds of feather flock together… All analysts expect the headline interest rate across the Euro zone to be left unchanged at 1%. As usual all eyes will be on the head of the ECB, Trichet who will echo the voice of other members during the press conference where investors will look for signs of potential timeline concerning the exit strategies. The meeting will mark the first anniversary of coordinated rate cuts by
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Nov 5
ECB preview: The system is liquid enough
The ECB is expected to hold the refinancing rate unchanged at the Governing Council meeting this afternoon. Jean-Claude Trichet is also expected to reiterate that “current rates remain appropriate” and will not signal any rate hikes for the near future. The most interesting is likely to be that we could get insights into how the ECB interprets last week’s 12-month auction and we could get a few more hints about how long the ECB is willing to keep rates at record lows. Governing Council member
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Nov 5
BOE Preview: October interest rate decision
Rate decision due at 1200 BST Keep rates on hold; stay in ‘wait and see’ mode; Remain cautious on the sustainability of the recovery; keep QE target unchanged at GBP 175bln though keep door open for further QE increases should economic conditions warrant it Unlikely to lower interest rate on bank reserves, but still a possibility later on All analysts surveyed expect the BOE to keep rates on hold at 0.5% for a 7th successive month. Any change in monetary policy or QE is more likely next month
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Nov 5
BoC Policy Monitor: BoC is more upbeat on the economic outlook
As expected the Bank of Canada left the overnight rate unchanged at 0.25 % and maintained its conditional commitment to maintain it at this level until the end of Q2 2010. Although the commitment is maintained, the tone of the press release was significantly more upbeat when it comes to both global and Canadian economic prospects. Whereas our central bank previously saw early strength in domestic demand as “just” a bringing forward of household expenditures, it now sees the recent rebound in
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Nov 5
Preview of BOE & BOC policy meetings
BOE meeting The Bank of England (BOE) will meet on Thursday, September 10th. At the August BOE policy meeting the BOE decided to hold interest rates unchanged at a record low 0.5% and announced a surprise expansion of quantitative ease. The BOE increased its quantitative ease program from £125 bln to £175 bln. The MPC minutes for the August meeting indicated that the BOE policy board was split over the decision to expand quantitative ease with three board members including BOE Governor King
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Nov 5
BOE and ECB: Preview of Thursday’s meetings
The Bank of England (BOE) will hold a policy meeting on Thursday November 5th. At the October policy meeting the BOE elected to maintain the current level of interest rates at a record low 0.5% and asset purchases at £175bln. The BOE indicated that they would keep the scale of the asset purchase plan under review. Two recent UK economic reports generated concern about the outlook for the UK economy and may encourage the BOE to expand its asset purchase plan at the November policy meeting. UK
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Nov 5
ECB preview: Waiting for the master plan
The ECB is expected to leave the refinancing rate unchanged at the Governing Council meeting on Thursday. We expect the tone at the press conference to turn slightly more positive (again) as both soft and hard data continues to improve further, but Trichet is unlikely to signal any rate hikes for the near future. Trichet might hint that the ECB intends to begin to roll back unconventional measures next year, but we do not expect him to give anything like a master plan or even an indication of
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Nov 5
FOMC minutes: Still cautious
Growth expectations were raised but there were few changes to the inflation outlook Labour market conditions were expected to improve only slowly and consumer spending to be no more than moderate Uncertainty over just how much slack exists justifies careful monitoring of longer-term inflation expectations and the clear communication of exit strategies Surprisingly, some members favoured an expansion of the MBS purchase program while only one wished to reduce it The outlook is unchanged with
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Nov 5
Japan: Upbeat BoJ not yet ready to unwind QE
As expected, the Bank of Japan (BoJ) has left its leading interest rate unchanged, but is more upbeat on the economy. It now believes the economy is recovering and it will probably raise its official forecast for GDP growth at the next monetary meeting. BoJ did not suggest imminent plans to exit some of its quantitative easing (QE) programmes. The size of QE has been modest in Japan and exit for that reason should be less complex than in the US and Europe and with little market impact. BoJ now
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