Asian markets make gains... but the FTSE100 dips into negative territoryOil extends its rise after the biggest one-day price increase in 6 yearsUK GDP confirmed at 0.7% growth in Q2Greece has a new finance minister: Yiorgas Houliaràkis Central bankers head for the hills 4.31pm BST With the FTSE 100 hovering around the unchanged mark and the Dow Jones industrial average on Wall Street similarly flat on the day, there is tentative talk that calm has returned to markets.Translated into Twitter-speak (using a cute cat, naturally), that’s:Stocks today vs. this week @CNBC pic.twitter.com/frj9Tk7xPg 4.27pm BST Central banks are very much in focus over coming days and policymakers’ words will be scrutinised for hints their fingers will be kept off the rate hike trigger for now given the latest market turmoil and signs global growth might have lost some steam. In the case of the ECB attention will be on clues to further loosening.After the Jackson Hole meeting of central bankers in Wyoming over this weekend, when the Bank of England’s Mark Carney is set to speak, attention will shift to the ECB’s latest decision on policy for the eurozone next Thursday and particularly the accompanying press conference by president Mario Draghi.On balance, we expect the ECB to reiterate its easing bias, using the same language used at the July meeting, when the risk of Grexit seemed imminent. At this stage, we would not expect the Bank to take any tangible policy actions, e.g. , by increasing the pace, the scope or the overall size of its QE programme. But we would not completely rule out any action either. No change is expected with the refi rate likely to stand on hold at 0.05% and QE continuing at a pace of €60bn/month.Most interest will, as ever, be focused on Mario Draghi’s press conference, where questioning is certainly set to focus on the recent market turmoil. But attention will also be on the outlook for ECB policy in light of a return in disinflationary pressures following the continued fall in commodity prices and a stronger euro. Recent comments from the Vice President, Vítor Constâncio, and Chief Economist, Peter Praet suggested the Governing Council would be willing to consider additional supportive action should it be warranted. Continue reading...
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