When Central Bankers Whisper Secrets - Bloomberg View
At a time when the U. S. Federal Reserve is being probed for leaking information to investment firm Medley Global Advisors, you'd think central banks worldwide would want their interactions with market players to be as impeccable and... London time today, the euro dived against the dollar after headlines flashed across trading screens saying the ECB would buy extra bonds this month and next to compensate for slower buying in the summer. A select group of traders, bankers and economists, however, had a 14-hour jump on that news -- because it had already been revealed to them at a private meeting in a Knightsbridge hotel last night:. We are also aware of seasonal patterns in fixed-income market activity with the traditional holiday period from mid-July to August characterised by notably lower market liquidity. The Eurosystem is taking this into account in the implementation of its expanded asset purchase programme by moderately frontloading its purchase activity in May and June, which will allow us to maintain our monthly average of 60 billion euros,... Here's another way of thinking about it: If the euro is currently worth about $1. 115 now that investors have absorbed the knowledge of the ECB's bond-buying plans, and it was worth $1. 135 before the world had any inkling of its intentions, then... But central bankers shouldn't be in the business of selectively disclosing. Source: www.bloombergview.com
