The Governing Council’s minutes indicate that the ECB intends to go with the seasonal trend of supply in the closing months of the year as well, bringing forward to October and November part of the December purchases….<\/p>\n
<\/p>\n
Sign up for our free newsletter to receive weekly news from BONDWorld. Click here to register for your free copy<\/strong><\/span><\/a> <\/strong><\/span><\/a><\/span><\/p>\n Intesa Sanpaolo – Research Department For professional investors and advisers only<\/strong><\/p>\n The minutes do not provide evidence of an imminent expansion of the asset purchase programme.<\/p>\n The minutes of the September FOMC meeting reveal a moderately accommodative stance, and obviously leave the monetary policy outlook as uncertain as it was before. The assessment of the outlook for the US economy remains positive: growth is moderate and labour market conditions are improving. As expected, the debate acknowledges that the recent developments of the global economic picture and of the financial markets could have restrictive effects via the appreciation of the dollar and the slowdown of the emerging<\/p>\n economies. However, these effects should be transitory, and risks to the scenario remain “nearly balanced”. The minutes show that concerns over the evolution of inflation (which, however, is not shielded from external influences) prevail over global risks in guiding the decision on rates.<\/p>\n The FOMC is split on the expected path of inflation. The Fed staff forecasts indicate that the 2% target will not be reached before 2018, due to the drop in energy prices and to the strengthening of the dollar. According to the minutes, “many” Committee members believed conditions for a reversal were already in place, or expected they would be soon. However, “some” signalled that their confidence in a return of inflation towards 2% had not increased, largely due to international and financial turbulences. All participants, even the more uncertain on inflation, however, shared the opinion that further moderate growth, and an improvement in labour market conditions, would help restore inflation to target, as indicated by Yellen in her lesson at Amherst.<\/p>\n For what concerns the timing of the first hike, “many” participants believed that conditions for a reversal would be in pace already before the end of the year, although “several” participants were concerned about downside risks to the outlook for real activity and inflation. We know that a wide majority, including Yellen, believes it appropriate to hike rates before the end of the year. The minutes are of no help in clarifying the scenario, after a weaker than expected September employment report.<\/p>\n Markets do not attach a high probability to an interest rate increase by the end of the year, and an important condition for a rate hike is signalling that a consensus is gelling within the Committee in the direction of policy tightening. The widespread perception that the Fed is struggling to achieve such internal consensus is affecting the currency markets more than the bond markets. The latter are currently reacting more to stock market impulses, whereas emerging market currencies are finding support in the regression of expectations on US policy rates.<\/p>\n For what concerns the minutes of the latest European Central Bank meeting, there were no particular expectations. The document offered no clues on the circumstances that would trigger a transition from more accommodative tones to action, nor did it hint at any urgency to act soon. It simply indicated that the Governing Council deems it appropriate to closely monitor data and the developments of the global economy and of the financial markets. However, the minutes do contain two technical details of some interest on the implementation of the EAPP programme: first, the ECB will try to bring forward to October and November part of the purchases planned in December, to go with the seasonal trend of the primary market; second, the raising of the issue share limit from 25% to 33% is a precautionary measure, taken in view of possible problems going forward in implementing the purchase programme on some markets where the availability of paper is more limited.<\/p>\n Appendix Important Disclosures<\/strong> Source: BONDWorld.ch<\/p>\n","protected":false},"excerpt":{"rendered":" The Governing Council’s minutes indicate that the ECB intends to go with the seasonal trend of supply in the closing months of the year as well, bringing forward to October and November part of the December purchases….<\/p>\n","protected":false},"author":2,"featured_media":3649,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"telegram_tosend":false,"telegram_tosend_message":"","telegram_tosend_target":0,"footnotes":"","_wpscp_schedule_draft_date":"","_wpscp_schedule_republish_date":"","_wpscppro_advance_schedule":false,"_wpscppro_advance_schedule_date":"","_wpscppro_dont_share_socialmedia":false,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"","_twitter_share_type":"","_linkedin_share_type":"","_pinterest_share_type":"","_linkedin_share_type_page":"","_instagram_share_type":"","_medium_share_type":"","_threads_share_type":"","_google_business_share_type":"","_selected_social_profile":[],"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[50],"tags":[],"class_list":["post-1769","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-weekly-analysis"],"blocksy_meta":{"styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":6}},"_links":{"self":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/1769","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/comments?post=1769"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/1769\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media\/3649"}],"wp:attachment":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media?parent=1769"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/categories?post=1769"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/tags?post=1769"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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