Monetary policy divergence lives! GBP vs SEK

•     Monetary policy divergence lives! GBP vs SEK

–    Bank of England looks past fall in oil prices, says it’s still on the path to tighten

–    Riksbank moves to negative rates and “mini-QE” even though inflation has bottomed

–    This divergence should support GBP, at least until election worries take over

•     EUR/USD opens higher on good news for Eurozone

–    Cease-fire in Ukraine is a positive move

–    Reports of progress in EU-Greek talks:  Germany said to be willing to compromise on austerity so long as Greece stays in a reform program; Greece reportedly is willing to stick to reform as long as conditions are loosened. Could be basis for compromise

–    Resolution of Greek crisis would probably boost EUR, be negative for JPY & CHF

•     RBA Gov. Stevens says RBA willing to support economy further

–    But questions ability of monetary policy to do much more at current levels

–    No major impact on AUD

•     Today:

–    Eurozone: Q4 GDP figures for France, Germany & Eurozone:  Eurozone growth expected to remain steady at Q3’s +0.2% qoq rate

–    Canada:  Manufacturing sales for Dec

–    US:  Preliminary U of M consumer sentiment for Feb