MNI BRIEF: Japan Aug Confidence Index Unchanged

MNI: PBOC Net Drains CNY208.4 Bln via OMO Thursday

MNI: PBOC Sets Yuan Parity Higher At 7.1299 Thurs; +2.34% Y/Y

CHINA PBOC CONDUCTS CNY150.9 BILLION VIA 7-DAY REVERSE REPOS THURS

CHINA SETS YUAN CENTRAL PARITY AT 7.1299 THURS VS 7.1216

MNI China Daily Summary: Wednesday, Aug 28

MNI: GERMANY NRW AUG CPI -0.1% M/M, +1.7% Y/Y

MNI: BAVARIA AUG CPI -0.1% M/M, +2.1% Y/Y

MNI: SPAIN AUG FLASH HICP +0% M/M, +2.4% Y/Y

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Lagarde: We Deliberately Didn't Discuss The Neutral Rate

ECB

Q: What are you expecting in terms of time lag? How long after raising rates will you expect to see an impact on inflation and inflation expectations? What is your insight on the neutral rate?

  • A: A July hike will not have an immediate impact on inflation.
  • Because of the anticipation of our monetary policy and the economic and inflation outlook, financing costs have already moderately increased.
  • With the signal that we are giving with respect to short term rates, this signal will continue to have an impact on financing costs. We have to stay the course and stay determined.
  • Inflation expectations are well anchored and we want to indicate to those who form expectations that we are determined to deliver on our 2% target over the medium term. Therefore, expectations should absolutely remain anchored.
  • A: We have deliberately decided not to discuss the neutral rate at this meeting. The neutral rate over time has gone down. But where it stands exactly is not something we have discussed at this meeting.
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