After a bit of a pause in February, the euro has once again started falling, following the start of sovereign bond purchases by the ECB and yet another strong US non-farm payrolls print. So just how low can it go? I see plenty of analysts calling for 105 or lower by the end of the … More Euro: when should we book the parity party?
A very interesting paper by Hamilton (et al.) out last week looked at the question of neutral real rates in the US (and elsewhere), and how they compared over time with average or ‘trend’ growth rates. Also out last week, was a really important speech by John Williams of the SF Fed, “The Economic Outlook … More FOMC: neutral real rates, accelerating growth and policy normalisation
February payrolls surprised materially on upside, printing 295K vs median expectation of just 235K. The expected combination of payback from a run of very strong prints and bad weather didn’t materialise, and instead the old favourite of the 3-month moving average would have got you closer than anyone in the survey. Alongside the strong jobs … More US NFP: going from strength to strength, but wages disappoint
Draghi gave a cautiously optimistic press conference yesterday. Putting to one side the raft of questions relating to Greece and Cyprus, the message I took away was that the ECB are pretty pleased with both the market reaction to the announcement of QE and the modestly more positive economic news over the past month or … More ECB: Draghi cautiously optimistic
While we wait for the new era of BoE communications to begin later this year, meetings such as those tomorrow that have almost no chance of any policy change will continue to be dull affairs for those who are looking for the latest insight into the minds of the MPC. No policy change, no statement. So … More BoE: nothing to do, nothing to say
Tomorrow we get to hear the latest from President Draghi on the outlook for the euro area, and more on the modalities of the QE programme. As part of their regular roadshows outside of Frankfurt, tomorrow comes from Cyprus. Which is kind of interesting, as with capital controls still in place there, is a Cypriot euro … More ECB: crisis avoided (again), but risks remain
As I expected, the RBA held steady overnight, disappointing the market and the majority of economists on the street. However, the accompanying statement – while little changed in substance from February – gave a fairly clear steer that further easing is likely. The key final section says: “At today’s meeting the Board judged that, having eased … More RBA: no change, but with an easing bias
I do sometimes wonder what the economics community in Australia is up to. Just a month ago only 7 out of 29 in the Bloomberg survey expected rates to be cut to 2.25% from 2.5% (Westpac was the only big domestic bank calling for the cut – well done Bill Evans). And of those who … More RBA: what a difference a month makes
While a couple of weeks have passed since the BoE released the February Inflation Report, I thought it was still worth looking back at the salient points, and the messaging that has followed. The most significant message in the Inflation Report was that the Bank made explicit that it would “look through” the one-off falls … More BoE: closer to hiking than you might think
As promised on Friday, here are a few thoughts on the section of the last FOMC minutes around “Liftoff tools and options”. The first thing that struck me was the following: “In their discussion of these issues, participants generally agreed that it was very important for the commencement of policy firming to proceed successfully. Consequently, … More FOMC: dealing with the plumbing when it comes to liftoff
Fundamental Macro 