Jane Foley, Senior FX Strategist at Rabobank discusses central bank outlook, need for structural reforms, and move from monetarism to Fiscalism.
Key points
BOE – Likely to keep doors open for further easing next year. Needs to see improvement in investment
BOJ –wants to steepen the yield curve and help pension fund industry and banks. Further deepening of negative rates appears difficult
BOJ and Fed - BOJ wants stronger dollar, but the Fed is unlikely to tighten policy sooner than expected
Fiscal spending - Central bank policy exhaustion, need for structural reforms would eventually force governments to come up with fiscal spending program