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When is it time to taper?

  • Central bank issues are something of a theme today. The only real data releases come in the form of UK consumer price data (there is also German producer price information). The market is looking for a small moderation in the rate of UK inflation.
  • The Bank of Japan is meeting today and tomorrow. A government panel was reminding policy makers that money can move offshore very easily - the panel was referencing financial market flows, but it could also apply to banks lending the BoJ liquidity outside of Japan.
  • Fed President Evans was sounding slightly more hawkish than usual in remarks yesterday. The debate seems to be shifting from "more versus less" quantitative policy to "when to scale back" quantitative policy. Two more Fed Presidents speak today.
  • Europe has the Bundesbank monthly report as its contribution to the monetary policy debate, but it is politics that is attracting media headlines. Germany is reportedly moving towards insisting on limited treaty changes for the EU - a topic fraught with complexity.

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