Riksbank’s policy dilemma

By Mike Peacock
April 29, 2015

Riksbank Governor Stefan Ingves attends a forum organized by Mexico's Central Bank in Mexico City

Sweden’s central bank delivers its latest policy decision with many analysts expecting a further interest rate cut and an expansion of its new bond-buying programme, reflecting its fear of deflation despite solid economic growth.

Data isn’t as objective as the Fed might have you believe

April 28, 2015

SFFedTshirt.jpgFed officials say they will be “data-dependent” when it comes to making monetary policy. San Francisco Fed President John Williams feels so strongly about it, he’s even printed up a T-shirt to get that message across. But truth be told, data-dependency is not as objective as it sounds. Data doesn’t dictate policy; it’s the interpretation of data that’s key. What is rate-hike-worthy data to one policymaker is keep-the-pedal-to-the-metal data for another. Take, for instance, U.S. GDP growth. Richmond Fed President Jeffrey Lacker says he expects GDP growth to average 2 percent to 2.5 percent this year, a pace that would justify a Fed rate hike in June. Chicago Fed President Charles Evans expects 3 percent growth this year, and does not believe even that would justify a rate hike until the first half of 2016. So what does it tell you about monetary policy if you see GDP growth of 2.5 percent? Not a whole lot, judging from these two. And the statements of other Fed officials are hardly more helpful. Indeed, as Atlanta Fed President Dennis Lockhart said recently, “I don’t think it is advisable to approach such a decision with rigid quantitative triggers in mind.” Watch the data, sure. But don’t assume the data will tell you much about the exact timing of the rate hike. Monetary policy – it’s subjective. Maybe some policymaker will print that on a T-shirt.

Déjà vu? Fed may struggle to hike if U.S. optimism fades for H2

April 28, 2015

RTR4VVNE.jpgThe U.S. Federal Reserve may find it even more tough to raise interest rates as the year wears on if dwindling expectations for growth are any guide.

Greek rumour mill in overdrive

By Mike Peacock
April 14, 2015

German Chancellor Merkel and Greek Prime Minister Tsipras leave after addressing news conference in Berlin

Greece returns from its Easter break with only a few days to improve on a package of reforms that the euro zone is insisting on in return for fresh bailout money.

Completing the Q1 euro zone picture

By Mike Peacock
April 7, 2015

Shoppers look for goods in a Karstadt hot deal department store in  in Frankfurt/Oder

Service sector PMI surveys for euro zone members, Britain and others in March will complete a first quarter picture which has generally shown the currency bloc outperforming the United States and China.

Reading the ECB runes

By Mike Peacock
April 2, 2015

European Central Bank President Draghi and Vice President Constancio leave after addressing an ECB news conferenc in Frankfurt

The European Central Bank will release minutes – or what it likes to call its account – of the last policy meeting after which it launched into quantitative easing.

Greek talks stymied

By Mike Peacock
April 1, 2015

Greek Finance Minister Varoufakis walks past  Eurogroup Chairman Dijsselbloem at a euro zone Finance Ministers meeting in Brussels

Greek negotiations are not moving much and an agreement before the Easter break looks increasingly unlikely.

Change in Nigeria?

By Mike Peacock
March 31, 2015

All Progressives Congresses presidential candidate and Nigeria's former military ruler Muhammodu Buhari addresses a news conference outside his house after he voted in Daura

A result in Nigeria’s close-fought election is due to be announced later. With votes from only six of 36 states uncounted, opposition contender Muhammadu Buhari has a lead of over 2.5 million votes over President Goodluck Jonathan.

Greek plan – a detailed programme or vague list of ideas?

By Mike Peacock
March 30, 2015

German Chancellor Merkel and Greek Prime Minister Tsipras leave after addressing news conference in Berlin

The Greek government has sent a reform package to its EU and International Monetary Fund creditors, hoping it will unlock desperately needed funds to stave off bankruptcy.

Could Yemen prompt an oil rally?

By Mike Peacock
March 27, 2015

 
Shi'ite Muslim rebels hold up their weapons during a rally against air strikes in Sanaa

Yemen’s President Abd-Rabbu Mansour Hadi has fled his refuge in Aden for Saudi Arabia as Houthi rebels battled with his forces on the outskirts of the southern port city.