October 30th – Top Stories
- QE expected to continue through 2014: CNBC survey - CNBC – By Steve Liesman
In a dramatic shift, the October CNBC Fed Survey finds Wall Street expecting the Federal Reserve to maintain its $85 billion level of monthly asset purchases until April 2014. That’s five months ahead of the average in the last survey.
What’s more, the 40 respondents—economists, strategists and money managers—see the Fed buying about $650 billion of assets next year, up from $381 billion in the September survey.
The current program, known as quantitative easing, in which the Fed buys government bonds and mortgages in an effort to stimulate the economy by driving down interest rates, is expected to last until December 2014. Respondents to the previous survey had thought the Fed would end its purchases by August.
- China to hold key economic reform meeting Nov 9 to Nov 12 - Bloomberg – By Bloomberg News
China’s leaders will hold a key meeting to discuss deepening financial reforms between November 9 and November 12, the official Xinhua news agency said, as the ruling Communist Party looks to set its economic agenda for the next decade.
The meeting marks the third time China’s 200-member Central Committee has gathered since last year’s leadership change. Historically, such meetings, known as third plenums, have been a springboard for economic change in China.
3/ Eurozone & UK
- Draghi Seeks Liquidity Tools to Fit ECB Rate Policy: Euro Credit - Bloomberg – By Jana Randow
Mario Draghi’s quest for new liquidity tools is proving more complex than two years ago.
When the European Central Bank president decided in 2011 to provide euro-region banks with three-year loans to ease a credit crunch, liquidity and interest-rate policies were separate issues. Now, cheap funding has the potential to affect the ECB’s interest-rate guidance and prompt banks to shore up their balance sheets rather than boost lending to companies and households as they undergo a review of their accounts.
ECB officials are drawing up plans to keep money flowing to banks to head off a liquidity squeeze when the first round of emergency long-term loans comes due in early 2015.