The head of the European Central Bank, Christine Lagarde, has a word of warning for the markets this morning:
She’s told Bloomberg that investors shouldn’t assume that current monetary policy is locked in for the foreseeable future just because officials are focused on reviewing their strategy:
She told Bloomberg TV:
“To those who think it’s on autopilot, that’s ridiculous…. Let’s look at the facts. Let’s look at how the economy evolves”
Introduction: Davos wraps up; UK PMIs in focus
Good morning from Davos, where the final day of the World Economic Forum is getting underway.
The annual shindig of the global elite, and some of their sternest critics, is wrapping up at lunchtime today.
Out on the streets, some of the corporations who took over Davos’s promenade are packing up, taking down their glossy posters.
But it’s not back to normal yet. Inside the Congress Hall, we’ll hear an update on the state of the world economy.
On the panel: Treasury secretary Steven Mnuchin, German finance minister Olaf Scholz, IMF chief Kristalina Georgieva, Bank of Japan chief Haruhiko Kuroda and ECB chief Christine Lagarde.
And outside the hall, Greta Thunberg (who Mnuchin thinks should go and learn economics) will be holding a school strike to focus attention on the climate emergency.
We’ll also get a new healthcheck on the UK economy today, when Markit’s survey of purchasing managers’ is released.
It will measure how businesses are faring this month, and whether there’s really a Boris Bounce taking place after the election. If not, then a weak reading raises the chances of a UK rate cut next week.
Ipek Ozkardeskaya of Swissquote Bank says:
Today’s data will give a first indication about the health of the British economy having found a certain political stability amid Johnson’s solid victory in December and a way to move out of the European Union avoiding the much-feared no-deal scenario.
A strong PMI read could tune down the rate cut expectations that spiked from nearly zero to 60% for the Bank of England’s January meeting. Any disappointment, on the other hand, should further revive the BoE doves and pave the way for the pound to slide below $1.30 before next week’s monetary policy meeting.
The agenda
- 10.30am Davos / 9.30am GMT: UK flash PMIs
- 10.30am Davos / 9.30am GMT: Session on ending single-use plastic
- 11am Davos / 10am GMT: Greta Thunberg leads a school strike for the climate emergency
- 11.30am Davos / 10.30am GMT: Session on the world economic outlook with Lagarde, Mnuchin, Georgieva, Kuroda and Scholz.