Developments from across the globe showed that market participants and Central Banks are eagerly awaiting the upcoming decision from the Federal Reserve after Central Banks of other advanced economies decided to leave policies mostly unchanged in light of possible developments. Both Australia and Canada left interest rates unmoved at 2.00% and 0.50% respectively while the main announcement from the European Central Bank left market participants stunned. Expectations for much more substantial action and expansion of existing monthly asset purchases were disappointed following a move to cut the deposit rate by an additional 10 basis points and extend the purchase program until 2017. A revision in the growth and inflationary outlook for the region echoed concerns that present policies were not aggressive enough to restore inflation and growth. In the United States, employment data was the most watched event with nonfarm employment figures showing the addition of 211,000 jobs in November, beating expectations of 200,000 while the prior month’s figure was revised higher to 298,000. The Euro remained elevated despite the positivity but this optimistic figure sets the stage for action from the Federal Reserve in the upcoming policy meeting.
Volatility Surges as Central Banking Controls the Narrative
Weekly Report - 06/12/2015