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Mainly monetary matters

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  • The US Federal Reserve minutes form the highlight of the day's releases. These cover the meeting that quietly abandoned the unwisely specific unemployment reference from the statement. The range of opinion on US spare capacity will be of interest.
  • The Bank of England meets today and is expected to do nothing on monetary policy. The BRC shop price index fell 1.7% yoy last month, but this is not prompting waves of hysteria over deflation - because other prices are rising, and consumers respond positively to discounting.
  • We have more ECB speakers today, and the message seems to be suspiciously coordinated- no deflation risks seen. The ECB needs to make it clear it has the means to act if deflation occurs, but to signal concern about deflation may depress sentiment and bring about deflation.
  • Bank of Japan governor Kuroda was not sounding in a hurry to ease monetary policy, though a covert easing may be accomplished by switching to monthly quantitative policy targets. Of course, there is a question as to what further easing would accomplish anyway.

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