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ECB announcements continue to reverberate

Chris Scicluna
  • Euro area  govvies remain volatile after yesterday’s ECB announcements prompted a major curve-flattening, while JGBs shifted significantly in Asian time as speculation persisted ahead of next week’s BoJ policy meeting.

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Will Draghi go out with a bang or a whimper?

Chris Scicluna
Emily Nicol
  • After a big mixed bag of Japanese data overnight followed Trump’s latest trade-war tweet, the ECB’s lunchtime announcement of its long-awaited policy stimulus package – to represent Draghi’s final throw of the dice – will have a major market impact. Key variables include the size of rate cut to be delivered, the design of any tiering framework that might be introduced, and the magnitude of any new QE programme.

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Boost to Japanese sentiment likely to be short-lived

Emily Nicol
Chris Scicluna
  • While a Japanese business survey suggested that firms were somewhat more upbeat about current conditions, they were predictably more uneasy about the outlook for Q4 when domestic demand will be hit by the higher consumption tax hike.

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PBoC’s rate cut precedes more easing from the ECB

Emily Nicol
Chris Scicluna
  • Asian markets took support from Friday’s announcement of further easing from the PBoC, despite some weaker trade figures over the weekend. The main policy event this week will be the ECB’s announcement on Thursday, where we expect a further cut to the deposit rate and QE to be announced.

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Kuroda talks JGBs as spending slumps

Chris Scicluna
Emily Nicol
  • After yesterday’s marked shifts in global bond prices, JGB yields inevitably moved higher today, with BoJ Governor Kuroda contributing  to a sharp rise at the ultra-long end. Data-wise, ahead of the US labour market, the news flow was disappointing, reporting weak Japanese consumption, falling German IP and a a marked drop in UK job recruitment.   

 

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