Daily update
Daily update
- Several central banks have been demonstrating masterful inactivity recently. The world leader at masterful inactivity is the Bank of Japan, which did nothing overnight. The Bank of England and the Swiss National Bank both left policy rates unchanged yesterday. Differences in inflation mean inactivity by the Bank of Japan continues a loose policy stance, but real borrowing costs rise with inactivity by the Bank of England and the Swiss National Bank.
- UK August retail sales were boosted by higher fuel prices, but the volume of fuel sales fell. UK consumers have a greater ability to adjust fuel demand than in the past—if people work from home three days a week rather than two, commuter-related fuel demand falls by a third.
- There is a rush of business sentiment polls today. These increasingly exaggerate economic realities—media sensationalism and a tendency to answer surveys with perceptions may be to blame. Worryingly, some market participants view the world as a rigid and unchanging place and do not adjust for the changing reliability of sentiment surveys when modelling markets.
- Several central bank speakers make their way onto the world stage. Those central banks that have trashed forward guidance will be at a disadvantage in issuing hawkish rhetoric if data starts to move against them.
