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Changing status

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  • Markets are still experiencing a lingering reaction to the Bank of Japan effectively declaring themselves to be at the limit of what Japanese monetary policy can do for now, and throwing the burden of economic growth back onto the hitherto non existent structural reform process.
  • Indonesia raised its discount interest rate by a quarter point yesterday - interest rates can, it seems, go up as well as down. The move was triggered by weakness in the currency, but we are sceptical that this measure alone will prevent the rupiah's slide.
  • Greece has been granted emerging market status by MSCI. This is technically an equity market classification (there is no formal economic definition) and follows the loss of roughly a quarter of GDP in the crisis, but it is not perhaps a helpful branding exercise.
  • Several Euro countries offer up inflation numbers, and the UK is giving us labour market data (with media comment on the extent to which wages have declined during the economic slowdown). Merkel and Schaueble of Germany both speak.

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