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Foxton’s made some changes to its award wining website this weekend. It may be coincidence, but they came after we asked the company about the ideas of a private investor who blogs under the name Anja Liszt.
Yup, we’re back here again. Here’s how Credit Suisse ranks the ECB’s options if, or when, the increasingly dovish governing council decides that more easing is necessary:
The first option comprises exhausting the ECB’s standard policy lever by cutting rates further. We expect this to be the first response if more needs to be done and could be prompted by inflation falling to 0.5% y/y or lower. A further cut in the key policy rate would also entail taking the deposit rate into negative territory.
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Two tables below the break, courtesy of Credit Suisse, detailing the ECB board’s easing predilections. Tabled story short, the increasing north/south divide that has accompanied the euro area’s drawn out crisis has lead to the balance of power shifting to the periphery. Or: doves in the ascendant. Interesting too that the Bundesbank might thus be pushing for ECB minutes to be released in order to quell those national interests.
Out of the 23 Governing Council members including 6 Executive Board members 13 are dovish or very dovish as we show in the table below, where we have assessed Governing Council members and their recent statements. The dovish cause of the periphery is further helped by the fact that three core representatives, both French nationals and the governor of the central bank of Belgium, have also been typically perceived to be in the more dovish camp. Increasingly the Bundesbank is thus becoming more marginalized which might explain the Bundesbank having consistently increased the volume of its verbal interventions throughout the crisis.
Markets: Stronger than expected data on Chinese manufacturing fuelled Chinese stockmarkets and the Australian dollar, which gained 0.6 per cent against the greenback. The China purchasing managers’ index survey by HSBC/Markit gave a reading of 50.8 for November, overshooting economists’ forecasts of 50.4. (Financial Times) Read more