In 2020 the ECB is having its Strategic Review. A probable outcome would be to expand its mandate. Now, ECB is only targeting inflation close to and lower than 2.0%. An unemployment target could additionally be included.
In 2020 the FED could probably change its full employment and symmetric 2.0% symmetric inflation target. There is a possibility to declare that it is targeting 2.0% symmetric inflation target though out the business cycle. Which could be translated that the FED would commit no rate hike unless the core PCE (core Personal Consumption Expediture index, the metric it uses to calculate inflation) reads 4.0%. The US yields are already increasing.
Today, the BOJ (Bank of Japan) communicates that is sticking to 2% inflation target. The monetary policy remains unchanged. The BOJ is patiently continuing its powerful monetary easing. It is sticking to targeting the 10year Japanese Government yields. There is no thinking of targeting shorter-term maturities.
Later today, the BOE (Bank of England) the Riskbank (Central Bank of Sweden) and the Norges Bank (Central Bank of Norway) are having their monetary policy.
Throughout the whole year (even during the Conservative Party leadership change in the summer) BOE was communicating that the monetary policy is implemented under the no hard Brexit scenario. Now that the political situation has cleared and an aggressive fiscal expansion is certain, it is interesting to see how the BOE intends to respond to the falling UK GDP and particularly its falling manufacturing activity.
The Norges Bank, the only major central bank that raised rates during 2019, is expected to keep its monetary policy unchanged. The Riskbank is expected to raise rates by 25bps and get back to 0%.
Macro releases: Other than the central bank’s meetings, traders have no other significant reading to expect from today’s economic calendar.
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