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Rates fall like dominos

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  • There are fewer and fewer places in the world that can cut interest rates. Israel is one of those places, and obligingly eased policy yesterday. The bias is still towards continued accommodation for many of the world's central banks - the exception perhaps being the US Fed.
  • Investing in this environment is, of course, difficult - even for central banks. A recent paper from the IMF highlighted central bank reserves have shifted towards currency diversification and even holding equities since the crisis - although these are trends that originated before the crisis.
  • The Eurogroup meeting concluded yesterday with the normal platitudes. The group would like swift and decisive action from Slovenia (it would not like slow and indecisive action, it seems). Newswires reported that Italy may revise its deficit in 2014 to 2.9% GDP (not 3%, you note).
  • The UK's funding for lending may not be fuelling small businesses but it is fuelling housing, with demand the highest in over three years according to the RICS. Germany, Italy and Spain offer CPI inflation today, and there is Euro zone industrial production.

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