Yen strength likely with further BoJ ill communication, asymmetric risks

This post previews Wednesday’s highly-uncertain but very important Bank of Japan policy meeting, featuring the Comprehensive Assessment of monetary policy. Overall, there’s a strong risk of BoJ disappointing dovish market expectations thereby generating Yen upside and a bond market sell-off (although the FOMC decision will also impact) and smaller market moves are likely should the BoJ try to … More Yen strength likely with further BoJ ill communication, asymmetric risks

September ECB: 6-month QE extension justified, but risk of disappointment

This post previews this week’s ECB policy meeting. The main points are: In July Draghi stressed that the ECB was open to all options on further easing, were watching emerging data closely and would use flexibility to meet their €80bn a month purchase target (they only managed €60.5bn in August). Several developments indicate that ending … More September ECB: 6-month QE extension justified, but risk of disappointment

Pleasantly-surprising manufacturing PMI doesn’t mean the UK’s out of the Brexit woods

This mornings’ substantially better than expected UK manufacturing PMI release – rising to an 10-month high of 53.3 in August, versus market expectations of a smaller bounce to 49.0 after July’s 48.3 – has generated substantial market commentary. The broad-based nature of the bounceback was notable, with rebounds in both the output and new orders balances. … More Pleasantly-surprising manufacturing PMI doesn’t mean the UK’s out of the Brexit woods