Follow Paul Donovan

Central bankers strive for attention

| Posted by: Paul Donovan | Tags: Paul Donovan

  • In a quiet day for data, various central bankers are making their way onto the world stage. ECB speakers are less interesting with no decision on quantitative policy expected before the December meeting. The disputes at the Fed make comments by Dudley and Bullard more relevant to markets.
  • Former BoE official Fisher has suggested that the next financial crisis may be caused by climate change. This is an interesting possibility. Some climate sensitive areas of the economy, like food price inflation, have the potential to provoke social tension and unwise policy responses.
  • Euro area purchasing mangers' sentiment data is the main release today. This is not a direct indication of reality (a reading over 50 does not mean economic expansion). This is an indication of sentiment – which is vulnerable to the influence of media sensationalism.
  • Credit rating agencies were active on Friday. One raised France's outlook to neutral from negative (a matter of little importance to markets). A Canadian rating agency used its specialist knowledge to affirm Portugal was investment grade in defiance of every other rating agency, meaning Portuguese bonds are eligible for quantitative policy.