UBS | The announcement of the policy decision at midday on Thursday will also include the minutes to the meeting, alongside the publication and press conference for the August Inflation Report. This will make for more transparency, but will mean a lot of information for the market to digest in one go.
July 1, 2015 | By Benjamin Cole via Marcus Nunes‘ Historinhas | The central banker’s club known as the Bank of International Settlements (BIS), suitably HQ’ed in Basel, Switzerland, this past weekend released its annual report, and advocated the globe’s major central banks raise interest rates to combat the chronic lack of aggregate demand and low inflation-deflation dogging the world’s developed economies.
MADRID | June 14, 2015 | By JP Marín Arrese | We take for granted that close to zero rates remain the driving force for delivering growth. The massive liquidity pumped in by Central Banks in developed countries has led to this widespread belief on the merits of cheap money. But such manna brings with it a number of drawbacks.
Intermoney | March 6, 2015 | From 2007-2015, global debt has increased 289% in excess GDP. The rapid increase of global indebtedness and financial asset prices could actually be defined as a global bubble with a major destabilizing factor: the significant surpluses accumulated by certain countries that force others to adopt a deficit position. International liquidity growth has only raised the volume of speculative money flows, which are now able to destabilise any economy, regardless of their economic virtues.
SAO PAULO | February 24, 2015 | By Marcus Nunes via Historinhas | It took three years, but in late 2011 Poland finally botched up and went the way of the majority of countries, letting NGDP fall way below trend. They didn’t (correctly) react to the 2007-08 oil price rise, like the US, UK, EZ, etc. and fared well, but didn’t resist when oil prices picked up again in 2010-11, when, among the initial group, only the ECB was dumb enough to react.
SAO PAULO | By Marcus Nunes via Historinhas | And now Sweden joins the “below zero” club and will also join the QE club. According to Riksbank Governor Ingves: “We are prepared to make monetary policy more expansionary,” Governor Stefan Ingves said at a press conference. The bank doesn’t see a lower limit on rates and can buy as much in government bonds as is “appropriate,” he said. It´s never too late, but it is worth remembering all the arguments put forth by Lars Svensson before he quit the Board in disgust.
By Peter Lundgreen via Caixin | Like the Swiss, the Danes are dealing with huge capital inflows from international investors, meaning the krone is a problem for the central bank.
By Benjamin Cole via Historinhas | The Swiss National Bank gave up trying to peg the Swiss franc to the Euro, and let the Swiss currency shoot to the moon. Some bankers were squeamish about a large SNB balance sheet, which the bank was garnering by printing Swiss francs and buying non-Swiss bonds.
LONDON | Barclays analysts | Central banks will remain in the spotlight this week, with banks in Europe, UK, Australia, Malaysia, Thailand, Poland and the Czech Republic all set to deliver policy decisions. Of these only the NBP in Poland is likely to move, cutting policy rates by 25bp, in our view. However, most attention will be on the ECB for any hints of future QE, as economic data remain a challenge.
MADRID | The Corner | Regarding the corporate bond purchases by the European Central Bank, market watchers at Barclays consider that it won’t be enough to expand the balance sheet by €1trillion. Expert Alberto Vigil notes that, since investors are already buying corporate bonds, it doesn’t make much sense for the ECB to also purchase them, especially given the fact that asset risks are not exactly cheap. (Graph by Bruegel)