The Central Bank of Brazil shocked markets in August by lowering its benchmark rate to 12 per cent. Will it cut again this Wednesday? Analysts expect so.
The Central Bank of Turkey, another of the emerging market central banks that has been taking economists by surprise by loosening policy, votes on Thursday, as does the Central Bank of the Philippines. Read more
Like a cardiogram, daily figures on use of the European Central Bank’s emergency “marginal lending” facility indicate the health of the eurozone bank system. When everything is working normally, the overnight facility is not used as it incurs a penal 2.25 per cent interest rate. For the past week the figures have signalled that something is amiss.
Occasionally there are spikes lasting a day or two when banks get caught short of liquidity by accident. But use of the facility has now been hovering around €3bn for more than a week - the latest reading on Thursday night was €2.9bn – which indicates significant problems somewhere in the system. Read more