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Quality decisions

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  • The ECB is expected to announce details of the asset quality review, and what is going to constitute a bad loan (which may not be the same as what Euro area banks think is a bad loan). The ECB has some powers as regulator, but little power to remedy or enforce under the current banking "union".
  • The Bank of Japan left policy unchanged - the timing for an adjustment was not exactly opportune. Meanwhile Economic Minister Amari was rushing around telling everyone "don't panic" and that the prosperity of Abenomics is just around the corner.
  • The UK has four Bank of England members testifying to Parliament - at a time when the forward guidance of backward guidance has been somewhat lost in translation. Questions on housing and medium term growth seem likely.
  • Australian business confidence was somewhat weaker than expected, dropping after last month's three year high. However, the softer tone to the Australian dollar and persistence of low interest rates this year should offer support.

Listen to the audio version of this briefing.