Holden Steering Forward Guidance

"What the Fed taketh away, the BoE and ECB giveth back".

We were not disappointed by Dr Aghi as he did indeed swing dovish to balance out last months Tourettish Hawk outburst. "TMM think that the usual oscillation in expectation and outcome for ECB meetings will result in a swing at the next event with Draghi producing a "more Dovish than expected". So, thank you sir.

The forward guidance bit was a bonus and reminds TMM of Daft Punk's "harder better faster stronger" but more along the lines "lower longer later slower". But then Daft Punk are French aren't they.

However, back to the QE relay race analogy. The baton left lying on the ground by Ben, appears to have been picked up by "Team Carnaghi". Carney came straight out of the blocks leaving little doubt as to his intentions, leaving us in turn wondering if "long FTSE  short GBP" is to become the new "long Nikkei short Yen" in five minute macro fashion land.

The process of wealth adjustment in the UK has so far been pretty smooth with the smarter of the population realising that it is a path that has to be endured despite the cries of closet isolationists who believe that local politics and command economy can preserve us in the face of globalisation (This issue makes the Trade Union/ Labour party associations appear all the more archaic. How UKIP can be accused of jingoism whilst those ancient bonds exist is beyond us).  But having accepted our fate of diminishing relative wealth, the least unacceptable route remains one of creeping local inflation with flat wage growth. So TMM feel that continuing Carneyage makes sense.

Draghi is a different matter, the ECB reminds us of the steering on a 1975 Holden  (an Australian vehicle that TMM once had the pleasure of driving around Sydney city centre  in the wee hours as its owner was too intoxicated to know his own name). This vehicle's unique feature was that the steering wheel was only loosely communicating with the front wheels with any form of instruction between "hard left" and "hard right" being left to the interpretation of the road surface, resulting in a wildly oscillating ride. Similarly the slack between ECB rhetoric and action is huge. We have had a 25bp cut from them but other than that and huge amounts of rhetoric/announced intentions/guidance/ noise/ speak they have actually DONE very little.  Cue the Monty Python " What did the Romans ever do for us" scene, only end it with the crowd going "errrrrrr..."

But that doesn't matter. The fact that the Mark "n" Mario show has shown a distancing from US policy, both having identified the steepening of yield curves as undesirable, the markets have kindly adjusted, doing their work for them.

 Oh and  NFPs?  DILLIGAF