Exchange rate channel losing traction in Euro area and Japan – SocGen

Alvin T. Tan, Research Analyst at Societe Generale, suggests that the unconventional monetary policy appears to be losing traction in both the Euro area and Japan.

Key Quotes

“The collapse in nominal interest rates in the two economies has meant a greater dependence on the exchange rate channel to effectuate monetary policy easing. However, neither the trade weighted euro nor yen has depreciated over the past twelve months, despite large-scale asset purchases and deepening negative interest rates.”

Mar 7, 2016

Japan: Suspending disbelief – Wells Fargo

Research Team at Wells Fargo, notes that among the advanced economies of the world, Japan has the highest debt-to-GDP ratio at nearly 250 percent of GDP.

Eurozone: Low inflation and political risks take centre stage – Goldman Sachs

Research Team at Goldman Sachs, suggests that the net effect of the recent market volatility on Europe’s growth outlook is likely to be relatively small in our assessment, with the boost to growth from lower oil prices offsetting the hit from weaker equity prices and a stronger Euro exchange rate.