21 Jan 2015
Key events coming up, Central Banks in focus - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank highlight the key events for the day ahead.
Key Quotes:
"Today we start with the BOJ’s latest monetary statement. These traditionally draw relatively little interest given the timing is not fixed and often nothing results - but we do get the odd massive shock, such as the 2014 ‘Halloween Special’ that massively increased the scale of BOJ QE without any prior warning."
"As alluded to above, there are market rumours that with oil prices falling fast, further sales tax hikes shelved by the government, JPY depreciation stalling, and with base effects consequently about to see Japanese CPI plunge in YoY terms, that the BOJ might have to admit defeat in its attempts to use endlessly escalating QE to achieve a sustainable 2% headline inflation rate."
"The whisper is that instead they will keep QE at the existing level, but slash deposit rates to negative, like the Swiss. On one hand, shifting policy again just two months after raising the ante on QE would smack of desperation."
"Yet given the Japanese yield curve is negative out to 4 years, with 10-year JGBs at an incredible 0.22% (!), negative rates would not look entirely out of place. Indeed, while this is just market speculation for now, desperate times make for desperate measures. Just ask the ECB."
"In the UK we get unemployment, seen -25K, and with average earnings ex. bonuses up from 1.7% to 1.9% YoY, so slightly positive in real terms. Notably, nominal pay rises were far higher than that back in 2010 and 2011 so that does not necessarily have to concern the BOE yet. Indeed, that point should be made in the BOE minutes, which are also released."
"The US has only housing starts data, seen +1.2% MoM, and building permits, expected +0.8%."
Key Quotes:
"Today we start with the BOJ’s latest monetary statement. These traditionally draw relatively little interest given the timing is not fixed and often nothing results - but we do get the odd massive shock, such as the 2014 ‘Halloween Special’ that massively increased the scale of BOJ QE without any prior warning."
"As alluded to above, there are market rumours that with oil prices falling fast, further sales tax hikes shelved by the government, JPY depreciation stalling, and with base effects consequently about to see Japanese CPI plunge in YoY terms, that the BOJ might have to admit defeat in its attempts to use endlessly escalating QE to achieve a sustainable 2% headline inflation rate."
"The whisper is that instead they will keep QE at the existing level, but slash deposit rates to negative, like the Swiss. On one hand, shifting policy again just two months after raising the ante on QE would smack of desperation."
"Yet given the Japanese yield curve is negative out to 4 years, with 10-year JGBs at an incredible 0.22% (!), negative rates would not look entirely out of place. Indeed, while this is just market speculation for now, desperate times make for desperate measures. Just ask the ECB."
"In the UK we get unemployment, seen -25K, and with average earnings ex. bonuses up from 1.7% to 1.9% YoY, so slightly positive in real terms. Notably, nominal pay rises were far higher than that back in 2010 and 2011 so that does not necessarily have to concern the BOE yet. Indeed, that point should be made in the BOE minutes, which are also released."
"The US has only housing starts data, seen +1.2% MoM, and building permits, expected +0.8%."