Well someone is going to have to shoot first – or maybe not.
Draghi deferred to Carney last week and now, Carney has punted to Yellen as the Bank of England stands pat. Here’s the BBG bullet summary:
BOE Keeps Rate at 0.25%; Vote 9-0; Holds QE at GBP435b
Bank of England says MPC unanimous on keeping gilt and GBP10b corporate bond purchase targets on hold.
BOE says MPC majority expect another rate cut this year if economy is broadly consistent with their August projections
Kristin Forbes, Ian McCafferty say current outlook don’t warrant additional gilt purchases; Forbes says argument also applies to corp. bond purchases
BOE says initial impact of August stimulus is encouraging
BOE says some near-term indicators better than expected; 2H GDP growth may slow less than forecast in August
BOE says MPC view of “contours of economic outlook” are unchanged
BOE says policy makers will assess recent news at November forecast round
BOE sees inflation reaching 2% target in 1H 2017
This is what the governor came up with on Wednesday with regard to Brexit:
“We thought about that and actually you’re more exhausted after the marathon than after the sprint so this is the wrong metaphor,” Carney said. “The right analogy is this is a Test series, a series of Test matches.”
Doesn’t quite top Kuroda’s “Peter Pan” moment but it comes pretty damn close on the absurdity meter.
Here’s some desk chatter from Citi:
“The Bank of England was a non-event as judged by interbank volumes traded – if one looks at the 15 minutes post announcement the July BoE, volumes were almost 10 times higher. In fact, interbank volumes from 07:30 to 07:45 BST in GBP were almost equally as high as in the 15 minutes after rate announcement today.”
“Interbank volumes were as low as the August 2016 average today with continued interest in USDCAD. In recent sessions we’ve seen a bias to buy USDCAD, which has continued today. We also saw EURUSD and GBPUSD buying today which where the determining factor of the net USD selling seen this morning.”
“Visible liquidity in EM pairs has been getting worse this week and trade impact metrics are also pointing to deterioration in liquidity.”
And for those interested, here’s a breakdown of what they can buy in the corporate sector:
So, over to you Janet and then we’ll get Kuroda (speaking of the BoJ, they need to get to work, because the Topix has fallen for six straight days on fears Kuroda may take rates even further into negative territory. An we all know his foray into NIRPdom turned out.