The European Central Bank cut its deposit rate below zero and said it would announce further measures later today as policy makers try to counter the prospect of deflation in the world’s second-largest economy.
Kristin Forbes, a former White House adviser who’s set to join the Bank of England’s rate-setting committee, may give clues today about her leanings as officials move toward the first policy tightening in seven years.
The data docket in the U.S. this week will be eclipsed by the Federal Reserve meeting as prospects mount that policy makers will trim stimulus in response to an improving economy. Elsewhere, November price data out of the U.K. will probably show inflation is cooling toward the Bank of England’s target, German companies gained confidence in December and inflation in Brazil picked up through the middle of this month.
Bank of England Governor Mark Carney has more than just interest rates to think about as investors begin speculating on how policy makers will unwind their 375 billion-pound ($624 billion) bond-buying program.
Data this week will probably highlight a divergence in global growth. Employers in the U.S. hired more workers in November, and the government in the U.K. may raise its economic forecast for the first time in three years. Conversely, Brazil’s economy may have contracted in the third quarter for the first time in two years.