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Taxing savers (and calling it negative yields)

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Another positive inflation surprise, although this time in China (with a very limited global read through). Chinese consumer prices rose during the distortions of the lunar new year holiday. Food was a part of the increase, and of course China is not a noted exporter of food to the rest of the world.
  • We hear from Nowotny of the ECB, the day after the implementation of Mr Draghi's bond buying plan. There has been a lot of comment on the implications of negative bond yields - perhaps best viewed as a tax on savers via the banking system.
  • US small business sentiment is released by the NFIB. Meanwhile the steady beat of Fed comment in support of the idea of a June Fed tightening has continued - the comments are so similar in tone as to at least raise the suspicion of a coordinated communication policy.
  • UK BRC nominal retail sales rose 0.2% on a like for like basis. Online non-food retail sales (also nominal) rose 8.3% yoy - the UK has certainly embraced the delights of internet shopping.