January 2015 Flash Report

Economic growth, inflation, and the political economy of central banking policies dominated investor attention at the start of the year. With oil prices still falling, markets once more focused on central bank actions and the likelihood that pro-growth fiscal policies would gain traction. Currencies also came to the forefront when the Swiss National Bank shocked markets by discontinuing its currency peg to the Euro, unleashing volatility and fears of currency wars. Subsequently, the ECB confirmed the expansion of its bond buying program, the BoJ left policy settings unchanged signaling potential growth, while the Fed added disinflation and “international developments” to its list of concerns. Finally, Friday’s fourth quarter US GDP report was up only 2.6%, a disappointing result to markets given the boost in consumer spending during the quarter.

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