Deflation is stalking the euro area.
As European Central Bank policy makers gather for their first meeting of 2015 today, the backdrop is a 0.2 per cent annual drop in consumer prices, the first in more than five years. For President Mario Draghi, who wants to open the money tap, the data may push the central bank closer to the unprecedented step of buying government bonds to revive growth and inflation.
If there was one thing that the market was demanding after last night's disappointing March HSBC manufacturing PMI, which has now fallen so low, local market participants are convinced a stimulus is imminent (despite China's own warnings not to expect this), and sent both the SHCOMP and the CNY surging, it would have been further weak data out of Europe, where the other possible, if not probable, "QE-stimulus" bank is located now that the Fed is in full taper mode.
The message of the day is "damn the consequences, the casino bar shall remain open", whatever it takes, no matter the consequences to taxpayers who will be responsible for the bar tab.
Bank of England Launches Two New Stimulus Packages
The BBC reports Bank shares jump on new business support plans
Bank shares have jumped in the wake of plans from the Bank of England to launch two new stimulus packages.