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Central bank divergence, again

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  • The G20 summit flew vast delegations to Australia at taxpayers' expense, and came to the astonishing conclusion that lower interest rates encourages risk taking. Surely abolishing the G20 makes sense? The case for abolition seems as obvious as one of its statements.
  • There is something of a battle of central bankers today, with the ECB President Draghi talking in the wake of the TLTRO operation last week. Mr Draghi invited lots of banks to come and play with his new toy, and it turned out that not many of them were interested.
  • NY Fed President Dudley is also expected to speak - important as we contemplate the end of quantitative policy in the US, particularly is Dudley is likely to play a central role as architect of how quantitative policy is to be reversed.
  • The data calendar is light today. Last Friday saw one of the credit rating agencies warn France on its fiscal position, but this is hardly new news. France has been a focus for investor concerns for some time. The comments do underscore the challenges of achieving fiscal stimulus n the Euro area, however.

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