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Central banks up ahead - Rabobank

FXStreet (Guatemala) - Analysts at Rabobank explained that today is mainly about central banks once again.

Key Quotes:

“The ECB’s Couere speaks, as does Constancio, Nowotny, and Weidmann. From the BOE we have Chief Economist Haldane also talking”.

“However, the highlight will undoubtedly be the speech from Janet Yellen on the topic of inequality”.

“The timing of the speech could not be better given that the market is desperate for a signal that the Fed will continue to deal out monetary ‘sugar’. However, the topic itself is either incredibly pertinent too - or is brilliantly ironic instead".

"While the Fed has been markedly defensive that QE has been aimed at helping Main Street and not just Wall Street, it openly states that it has tried to do that by pushing up equity and home prices – which by itself is always going to create a gap between asset holders and those who rely on labour incomes (which is a far larger group)".

"Moreover, the reverse direction in oil late yesterday also backs the view that QE has helped push commodity and energy prices higher, which further punishes the poor rather than the rich”.

“Will Yellen find a new way to square that circle, or will she just repeat the previous mantra?”

“Data-wise we only have three points of interest, all in the US. They are housing starts and building permits (both expected to be very strong, but on the back of weak readings the month before)”.

“We also have Michigan consumer confidence for October, where we can see what a combination if ISIS, Ebola, and a (very recent) stock market correction have done for the survey respondents in the Michigan area: the expectation is that there will be only a very slight impact: surely there must be some risk of a downside surprise against that upbeat consensus? Oh, and Happy Friday!”

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