LONDON | By Barclays analysts | We expect Europe to experience a long period of moderate economic growth, coupled with very low inflation: for the EU28, GDP should grow 1.5% in 2014 and accelerate to 1.7% in 2015, while inflation should bottom at 1.2% in 2014 before edging up slightly, to 1.4%, in 2015.
SAO PAOLO | By Marcus Nunes | ECB Executive Board member Benoit Coeuret told a journalist club on Monday night that the European Central Bank was ready to act, but that the euro zone was not edging towards a dangerous fall in prices.
LONDON | By Jim McCormick, Anando Maitra and Sree Kochugovindan at Barclays | Nearly a year ago to the day, the LDP and its leader, Shinzo Abe, won a landslide victory in the Japanese elections. Since then, it has been an extraordinary twelve months for Japan. GDP growth is set to be the highest of all major economies, by a good margin. Inflation and inflation expectations are at the highest levels in some time. The equity market has surged 75% since the election, and the trade-weighted yen has fallen 30%.
SAO PAOLO | By Marcus Nunes | Mr Ambrose Evans-Pritchard explains “Mario Draghi said the ECB is studying what happened in Japan at the onset of its Lost Decade in the 1990s, insisting that the EZ is unlikely to go the same way.”
SAO PAULO | By Marcus Nunes | According to Lars Christensen, central bankers around the world talk about monetary policy as being “unconventional” when they undertake “quantitative easing” to expand the money base. This term frustrates me a great deal as there is nothing unconventional about the fact that the central bank is changing the money base.
MADRID | By Luis Arroyo | The shadow of deflation looming over the euro zone economy have seemingly gone away on Friday. The statistical office Eurostat anticipated an estimated 0.9% yearly inflation rate, two percentual points under last October registers. However, being afraid of deflation is not a nonsense because next banking recapitalisation points that credit is to tighten.
SAO PAULO | By Marcus Nunes | Recently, both Simon Wren-Lewis and Paul Krugman have singled Sweden as a country where the central bank has moved from targeting inflation to worrying about ‘deflating’ bubbles.
TOKYO | By Leika Kihara and Stanley White at Reuters | European Central Bank Governing Council member Christian Noyer said on Monday that interest rates have to remain low for an extended period and might go even lower if needed as officials try to ensure the euro zone does not fall into deflation.
LONDON | By Michael Pond and Chirag Mirani at Barclays | Some at the Fed believe that a higher inflation target could be a good strategy, though one that is difficult to communicate. Instead, in our view, it has an implicit near-term tolerance for above-target inflation; forward breakevens should be higher as a result.
LONDON | By Barclays analysts | Although Q3 GDP data for euro area countries indicated growth for the second consecutive quarter, thereby confirming the end of the recession after six quarters of GDP contraction, it also showed the recovery to be subdued, uneven, and fragile.