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An event organized by the ECB, bringing together the mightiest central bankers of the major currencies of the world together to TALK SHOP?!

Will we expect any surprises during this meeting or will all the central bankers keep a neutral tone on their respective monetary policies?

Let’s see where the different central bankers positions are at the moment: –

Yellen: the rate hike in December is a done deal and Wall Street has fully priced in the hike. Everyone is now speculating about the ‘path’; both speed and magnitude, this will move the financial markets.

Draghi: he keeps on maintaining a neutral position, saying that monetary policy could go either way depending on the needs of the Eurozone.  However, he did mention that the easy monetary policy is coming as the policy has produced positive economic results in the eurozone area supposedly far better than the USA.

Carney: he is also hinting about a rate hike but didn’t pull the trigger in the last BOE meeting.  Is the BOE deliberately keeping the GBP bidded?  We know that the UK economy is a services economy, a financial markets economy and an education economy. The education sector is rather inelastic, so even is the GBP is stronger, people who need to fund their children’s education in the UK will just keep on paying the higher exchange rate.  The services economy and financial markets economy is beginning to feel the exodus of firms moving out of the UK.  Volumes of trades in the financial markets for the time being is still stable.

Kuroda: no sign of monetary tightening from him. He keeps on reiterating that Japan will have no problem hitting its inflation target of 2%, but the fact is it’s still far away.  Abe’s 4 arrows economic policy had limited impact on the economy and thankfully, he has been re-elected, so any new arrows to look forward to?

The world seems to be in a state of flux both from the economic perspective and also from the monetary policy perspective.  Financial markets like the USA has gone crazy, with P/Es never seen before in the past 10 years.  Is liquidity channeling itself into the financial markets instead of the real economy?  It may appear to be so.

December 2017 will be rememberd in history as one of the pivotal months of the past 10 years.  I am not so sure traders will be closing their books just yet and miss out on what could be one of the best trading periods for the entire year.

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