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Let's talk policy

| Posted by: Paul Donovan | Tags: Paul Donovan

  • Chinese central bank governor Zhou has opined on, well, everything. He does not see a need to depreciate to boost exports and growth (just as well, as that does not really work in the modern world). He sees capital outflows as finite.
  • Japanese fund managers are reportedly worrying about the introduction of negative rates this week, fearing that retail investors will withdraw funds to deposit with banks (where, presumably, they will earn 0%). Negative rates should be viewed as a financial tax.
  • The ECB's Draghi is due to speak to the European parliament. This is unlikely to follow Fed Chair Yellen's more balanced remarks of last week. Mr Draghi seems to want to ease, and indeed his passion for easing may have inflamed the recent market volatility.
  • Euro trade numbers are due. Aside from signals of international demand, export values will be affected by oil (lower oil prices can lower non-oil export prices) and currency (Euro area companies have rapid price inflation when selling goods overseas).