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Avowedly neutral

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  • Yesterday's PMI data reversed the trends of 2013, with the Anglo-Saxon world growing more slowly than expected while the Euro area grew more rapidly (for the most part). The Euro data did show strength in exports, however, signalling the world economy may be OK.
  • Australia's Reserve Bank left interest rates unchanged and announced an avowedly neutral monetary policy. We do not see any change in rates over the course of 2014.
  • BoJ governor Kuroda was sounding like a policy maker who has no immediate intention of changing policy. The finance minister was pleading with markets not to weaken in response to the US Fed's reduced quantitative policy.
  • The data calendar is pretty quiet today - some price data from the Euro area and Italy and a brace of Fed speakers are the main events.

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