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Focus today turns to the ECB monetary policy

Published: Thursday 12 April 2018

  • ‚ÄčTrump’s missile warning makes markets nervous
  • Aussie Data disappoints
  • ECB minutes awaited
By David Johnson

Focus today turns to the ECB monetary policy 
The focus today turns to the minutes from the last monetary policy meeting of the European Central Bank (ECB). The Euro pushed higher earlier this week following comments from the outspoken ECB Governing Council member Ewald Nowotny after he called on the ECB to start the process of raising interest rates. From the meeting minutes the markets would, as usual, like to know more on the central bank’s plans on altering its language and forward guidance. Also, questions will remain on whether the ECB will stop the asset purchase programme after September, or if it will taper off over a period of time. All or none will be revealed at 12:30 GMT. For now, the Euro is stronger against the embattled USD but weaker against Sterling.

Minutes of the FOMC meeting revealed
Last night we saw the minutes of the March Federal Open Market Committee (FOMC) meeting revealed. Almost all policymakers supported a rate hike even though a couple of members pointed to the benefits of waiting a bit longer. All policymakers expected inflation to rise in the coming months after a recent period of receding worries about the inflation outlook.  The hawkish minutes were overlooked however as attention turned to geopolitical risks in the Middle East. President Trump upped the ante by tweeting that Russia should be aware that “missiles are coming” although he did walk that back a little in due course. The world is waiting on the US reaction and markets are beginning to price in the risk of serious escalation involving the US and allies, including the UK. 
Aussie Consumer Inflation expectations slows
We also heard overnight that Australian consumer inflation expectations slowed to 3.6% in April and Australian home loans dropped -0.2% from January to February. The Sterling – Australian Dollar rate remains in the A$1.82 areas.
Looking ahead, Eurozone will release industrial production today and the US will release import price index and jobless claims figures. None of these data items are expected to quicken pulses or cause dizzy spells.
Oh and the world is going to end on April 23rd. I thought I would mention it in case the mathematical prophesy made by David Meade comes true. It would make me look good…if there were anyone left to compliment me…which there wouldn’t be. Let’s hope it doesn’t happen then eh!
In the Garden of Eden
One day in the Garden of Eden, Eve calls out to God, "Lord, I have a problem!"
"What's the problem, Eve?"
"Lord, I know you've created me and have provided this beautiful garden and all of these wonderful animals, and that hilarious comedy snake, but I'm just not happy."
"Why is that, Eve?" came the reply from above.
"Lord, I am lonely. And I'm sick to death of apples."
"Well, Eve, in that case, I have a solution. I shall create a man for you."
"What's a 'man', Lord?"
"This man will be a flawed creature, with aggressive tendencies, an enormous ego and a reduced ability to empathize or listen to you properly. All in all, he'll give you a hard time. But, he'll be bigger and faster and more muscular than you. He'll be really good at fighting and hunting fleet-footed ruminants, so he’ll provide for you and there will be other ways you can entertain each other."
"Sounds great," says Eve.
"Yeah, well. He's better than a poke in the eye with a sharp stick but there is one caveat. You can have him on this one condition."
"What's that, Lord?"
"It is probably best for all of us if you let him believe that I made him first."

Joke of the day
Did you hear about the love affair between sugar and cream?  It was the icing on the cake.
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