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Monetary policy signals

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  • The Bank of England starts its two day policy meeting with the British Retail Consortium reporting a larger than expected decline in its shop price measure (-1.4% yoy) but with concerns still rumbling about asset price inflation (i.e. house prices).
  • Fed Chair Yellen is due to testify to the Joint Economic Committee of Congress, with market attention slowly moving from quantitative policy (ending in October on the current schedule) and towards monetary policy (how soon and how quickly to rates rise?).
  • German manufacturing orders data was softer than expected, with a decline last month. French industrial production data is also due. In China manufacturing sentiment moderated a little (though points to slower expansion, if the numbers are to be believed).
  • The Bank of Japan minutes showed an ongoing commitment to quantitative policy in the wake of the consumption tax increase (no surprise) without giving hints as to when any escalation of the policy might be expected.

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