Global central banks co-ordination – Deutsche Bank

George Saravelos, Strategist at Deutsche Bank , suggests that there is a co-ordinated shift from developed world central banks in a more hawkish direction, all apparent in rhetoric from the ECB, Fed, Bank of Canada, Bank of England and likely others in coming weeks.

Key Quotes

“This global co-ordination was implicitly confirmed by Draghi’s little-cited comment in the central banker Sintra panel yesterday where he noted the importance of G20 central bank co-ordination in keeping market volatility low. The implicit message here is that if all central banks sound hawkish at the same time then divergence, and therefore FX volatility, will stay low. The problem with this convergence however is that the Fed is already in tightening flight mid-air with other central banks just about to take off the runway. With the next big question for the market the timing of a Fed "landing", hawkish co-ordination in such an environment can do serious damage to the dollar.”