ECB Governing Council member, Dutch central bank Governor Klaas Knot talked about monetary policy as he presented his bank’s annual report in Amsterdam today. He said:
- “The top priority is to normalize monetary policy and strengthen the economic and monetary union,”
- “This is now a widely-shared realization, certainly also in the financial markets.”
- “If you look at the market expectations of our policy action, I would say they have more or less converged at what I call a sweet spot,”
- “There is a fair degree of consensus around these expectations.”
- “I would say the likelihood of us erring on the side of being too cautious is a bit larger than for us being too bold,”
- “All in all, undoing these unorthodox, unconventional instruments could easily last for most of a decade.”
Regarding trade relationship with the US, he said:
- “The question is if Europe will come with countermeasures which could make us slip into a trade war,”
- “But don’t be mistaken, if the U.S. were to implement trade restrictions on say steel, it will be the American consumer paying the price.”
US jobless claims dropped to lowest since 1973, Canada GDP missed, USDCAD yawns
Canadian data are generally disappointingly. GDP contracted -0.1% mom in January versus expectation of 0.1% mom. IPPI rose 0.1% mom in February versus expectation of 0.4% mom. RMPI dropped -0.3% mom versus expectation of 2.8% mom rise.
US personal income rose 0.5% in February, spending rose 0.2% and both met expectations. Headline CPI accelerated to 1.8% yoy while core PCE also accelerated to 1.6% yoy.
Initial jobless claims dropped -12k to 215k in the weekended March 254. That’s notably below expectation of 231k. That’s also the lowest level since January 1973.
Four week moving average of initial claims dropped 0.5k to 224.5k.
Continuing claims rose 35k to 1.87m in the weekended March 17.
There’s a bit of spikes on both direction after the releases. But that’s it as USD/CAD quickly settle back into today’s tight range.