The US Federal Reserve officially ended their quantitative easing program in October while, across the Pacific, the Bank of Japan announced that it was ramping up its own QE program. This follows the ECB in July announcing their asset-backed securities and covered bonds buying program. These announcements clearly highlight the divergence in global monetary policies.
In the US, the economic recovery continues with further improvement in its labour market. In October, the unemployment rate fell from 5.9% to 5.8% although the 214,000 jobs added fell below expectations. US inflation remains subdued at 1.7% y/y in September, providing room for the US Fed to remain dovish and delay raising its policy rate. Other measures of activity also pointed towards solid growth in the US. The manufacturing Purchasing Manager Index (PMI) recorded 55.9 which, despite having fallen from 57.5 from the previous month, is still at a relatively high level.