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Farewell forward guidance

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  • The Anglo-Saxons have been discretely abandoning monetary policy forward guidance. The Bank of England minutes showed a more catholic approach to policy drivers than the Canadian accented emphasis on unemployment. The Fed minutes showed quantitative policy is being scaled back on automatic pilot.
  • US Treasury Secretary Lew suggested that the world should not rely on the US to be the engine of global growth. This is a little unfortunate as the US is looked to as the engine of global growth this year - export led growth (or at least export assisted growth) is fashionable elsewhere.
  • Japan's trade data showed an ever wider deficit, and confirmed that Japanese exporters are more interested in the pursuit of profits than they are of market share. Chinese manufacturing sentiment data is due today, and will doubtless be given more emphasis than it deserves.
  • Euro area flash manufacturing sentiment is scheduled, and should show a relatively robust performance. US consumer price data is not likely to be the main focus amidst the concerns about the scale of weather impacts on data - instead Philly Fed manufacturing sentiment numbers are likely to attract attention.

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