North Korea again!


Muddled ECB moves closer to QE in January
China: Government cuts “red tape” further
Week ahead: Shortened week but still some key data

Good morning,

It wouldn’t be Christmas without a threat from North Korea. This time it is threatening America over ‘The Interview’ and then some. The Dear Leader, or whatever that lad’s name is, was on the airwaves this morning predicting Armageddon.

In the real world things are less explosive. As we head into the end of the year it seems like the ECB (despite German objections) is moving closer to QE, with two key speakers over the weekend suggesting as much.

The ECB’s Constancio sees a “negative Eurozone inflation rate in the coming months”.

These comments from the ECB vice-president come in an interview with Germany’s Wirtschafts Woche due to be published today.

Citing that oil prices had fallen by an extra 15% since the last ECB inflation forecast of 0.3%, Constancio admitted the fall in oil created a clear deflation situation in the short-term.

However, he said that several months of negative inflation would not translate into deflation. The question is why? Dose he not understand the dynamic of expectations?

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Global Macro-Daily Note 22nd December 2014


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Categories: Daily Note