While the ECB’s decision last week to begin tapering of asset purchases can be considered a positive move for the eurozone economies, it is a stark reminder of the Bank as being out of step with other policy makers.
Eurozone woes have long been a cause of headaches, though the other major developed markets are hardly in sync.
Last week, Old Mutual Global Investors’ CEO Richard Buxton suggested Mark Carney is “facing 180 degrees in the wrong direction” with the Bank of England unlikely to follow the Fed in raising interest rates anytime soon.
A big differential in the rate cycle between the two countries, Buxton warned, would be bad news for the domestic economy yet to face up to the realities of Brexit.
While recent months have seen tentative evidence of Japan winning its battle against deflation, it too remains on a path world’s away from the direction of the west and its Asian neighbours.
With markets looking increasingly towards forward guidance for indications of the health of various economic regions, rhetoric is everything.
