Divergent central banks
- US Fed speakers were seemingly preparing investors for the tapering of bond purchases by the central bank. Even the normally dovish Bullard was sounding quite bullish on employment. More economists are shifting their expectations of the tapering timing forward. We expect a January move.
- Things are going quite the other way in Japan, where two thirds of companies (according to a poll overnight) now expect the Bank of Japan to provide further quantitative policy accommodation during the first half of 2014 - a view that we have long held.
- Bank of England Governor Carney was giving guidance on forward guidance. Concerns about the housing market were acknowledged, but there was also some dovish remarks about the threats to growth (coming from Europe for the most part).
- Industrial production is the main data release for the day. Data from China was pretty unexciting. The Euro area figures will be looked to for signs of further economic divergence - with the French and Italian numbers a particular focus, perhaps.
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