The central banks of the world continue to blow bubbles
On Wednesday, the European Central Bank (ECB) has allocated a new batch of money. Within the next auction for granting loans super long TLTRO banks were still 46.2 billion euros at the zero rate. The Fed also did not scare and market participants expected, kept rates unchanged at 0.25%. At the same time, we recall, the US regulator has lowered forecasts for the economy and reduced the forecasted number of rate increases next year.
Against this background, we see the rapid growth of virtually all assets. Financial institutions buy any risky asset that can bring income, including bonds of developing countries, with an interesting yield.
Leading US stock index – the index of wide market S P 500 – it has almost returned to its record highs.
Details: http: //www.vestifinance.ru/articles/75351
Moreover, this week the Bank of Japan announced a review of the monetary policy. The regulator decided to give up the monetary base landmark as one of the major targets. Instead, the Japanese Central Bank will begin to target the yield on 10-year government bonds at the current level of about 0%.
And although the market initially reacted to the decision of the yen strengthening economic commentator Grigory Beglaryan confident that sooner or later, the new strategy will lead to a drop in the yen, which means in risky assets around the world will rush back the Japanese capital.
Today, by the way, the Japanese yen depreciates against the dollar and the euro by about 0.4%.
However, of Citi experts believe that the Bank of Japan’s decision is mainly due to lack of funds for the purchase of assets, and in addition, the Bank of Japan sought to avoid adverse effects on financial stability.
"These actions mean that central banks (in particular, the Bank of Japan, and to a lesser extent, the European Central Bank) have become increasingly aware that the previous paradigm … is deeply wrong and needs to be replaced", – stated in the Citi report.
"An urgent challenge for central banks is not so much a reduction in the effectiveness of such purchases, but rather the narrower question of what the appropriate assets for purchases end"- experts say.
Details: http: //www.vestifinance.ru/articles/75351
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