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Seurat Yellen

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  • The Bank of England minutes are due - and it seems likely that a consensus on tightening is emerging rather than a hawkish split. Markets will focus on 1) timing, 2) speed and 3) triggers for action (obviously - what else would markets be interested in?).
  • The Fed meeting should conclude with the normal $10bn reduction in quantitative policy; the market will not care. What does matter is any shift in tone at the press conference (three new members join the FOMC), and the picture painted by the infamous "point" forecasts.
  • The Fed press conference may have questions about inflation, as consumer prices have picked up. Interestingly, food prices were a key part of the US inflation rise, and there is a (small) global component to food. This may be a pertinent signal for the Euro area and Asia.
  • The minutes of the Bank of Japan meeting where citing export growth as a supporting factor for the economy. It is perhaps somewhat unfortunate timing that the trade data was released on the same day as the minutes, showing slower exports.

Listen to the audio version of this briefing.