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Anglo-Saxon central banks

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  • The Bank of England minutes are due, and subject to much fevered investor interest. We do not expect the new governor voted for further easing. In the event that he did it is unlikely he persuaded anyone else (MPC members will be swayed by economics, not a new governor with a weird accent).
  • Fed Chairman Bernanke has to make his semi-annual testimony to Congress. Greater clarity around the distinction between an accommodative policy and quantitative policy is likely. Reduced bond buying with negative real interest rates is still accommodative.
  • The Fed Chairman is followed by the Fed's Beige Book of economic anecdote. The proximity heightens the importance of the Beige Book. If the Chairman indicated (for instance) that the labour market was key to quantitative policy reduction, investors will scour the Beige Book for labour market anecdotes.
  • The Bank of Japan minutes offered little interest to markets. China released foreign direct investment data (FDI inflows in the first half grew about half the pace of the economy �€“ perhaps a result of capital account protectionism elsewhere in the world).

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