Recent Blogs




Kuroda waves his wand again

  • The BoJ today defied expectations and unleashed a further expansion of its already massive QQE programme.
  • Not least by facilitating reforms to the GPIF pension fund, the new money  to be created by the BoJ will keep JGBs well supported, give a boost to domestic equities, and further weaken the yen.

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Rouble Trouble

Russian asset prices have got hammered as events in Ukraine and sanctions start to bite. Despite recent reports to the contrary, the current CBR leadership is likely to resist the imposition of capital controls. But as ever in Russia there are countless risks and almost anything is possible.

The BoJ's Tankan Survey: Steady as she goes

Today’s BoJ Tankan Survey was broadly upbeat, suggesting that business conditions are broadly favourable across a range of sectors, firms are ready to invest more, and the labour market is tight. So, despite some recent weak economic data, next week’s Policy Board meeting is unlikely to see the BoJ revise significantly its assessment of the economic outlook or signal the likelihood of extra stimulus.

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Draghi's ECB: Bottom of the table

The ECB now aims to return its balance sheet back to 2012 levels. But meeting that ambition, in the near term at least, is going to be extremely difficult. And, even if it can, both the nature and size of the balance sheet increase it implies is puny relative to what the world’s other major central banks have undertaken. 

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ECB Preview: Will Draghi rise to the occasion?

For Draghi not to prove a big disappointment tomorrow, he needs at least to maintain the language he used at Jackson Hole as well as provide strong hints of further action to come. Failure to do either would be bad news for euro area government bonds and good news for the euro. And it would also signal that his attempt in Jackson Hole to bounce the Governing Council into QE had failed, for now at least, leading to a general downgrading of the probability of QE that has been priced in post-Jackson Hole.

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