Into year-end we have noted a number of key shifts in what Central Bank language is actually telling us from a quantitative point of view. We regularly track and update our measure of positivity/negativity of Bank language contained in statements, outlooks and speeches on a scale of -1 to +1 in our DataHub for premium subscribers. There you can access full histories and dig deeper into the underlying drivers. Note – our sentiment tracker is a moving average rolling over 10 instances of Bank communication. For each speech, statement, policy statement etc, we calculate sentiment via domain-specific language and terms used by policymakers. Data above 0 indicates more positive sentiment, whilst data below 0 indicates negative sentiment. Chart 1: An uplift in BoJ sentiment stands out – the most positive since April 2015 Net positive sentiment from the BoJ, between its statements, speeches and policy outlooks, is the strongest it has been since April 2015 on our measure at +0.14. That uplift is being led by consistent positivity in the policy statements, which have come in above the moving average since mid-2021, but acutely taken off into H2 of 2023. Of the three central banks we cover – all of which are directly comparable – the BoJ is, in relative terms, also far more positive. Chart 2: The ECB has also bounced off of the lows We also highlighted in our November update that ECB sentiment had reached its most negative point at any time on our measure (going back […]

Here we highlight 3 key observations from our Central Bank Sentiment tracker, with the ECB, Fed and BoJ all exhibiting interesting shifts in their language at an important policy juncture.