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Data-Driven Policy Intel -- Monetary Policy & FX Rates Case Study

What does data-driven predictive analytics look like when it comes to public policy risk? When we receive this question, the answer is simple: it requires looking at words as if they were structured data. We have automated that process, making it easier for strategists and analysts to spot strategic shifts amid a noisy news cycle. Today's needle in the haystack involves a potential shift in European monetary policy in relation to exchange rates.

Background: Our patented process provides automated information triage opportunities that accelerate the speed with which knowledge professionals can navigate the flow of information to find actionable insights faster and better than traditional information discovery methods. The current PolicyScope Platform automatically (i) converts the words of the public policy process into structured data (numerical integers) and (ii) analyzes the language to deliver information triage for our users.

We are building curated training data for machine learning and artificial intelligence applications, but the platform delivers important productivity and efficiency gains for analysts and strategists right now. The PolicyScope Platform makes it possible to discover strategic shifts in public policy. For example, while this morning's news cycle was dominated yet again by Brexit and China, an important monetary policy signal from the European Central Bank (ECB) managed to avoid generating headlines.

Case Study -- Monetary Policy and RX Rates: Consider this morning's activity pie chart for COVID-19 items in our PolicyScope Platform today.

Much activity regarding COVID-19 economic policy over the last few weeks has shifted. Policymakers refer to COVID-19, but rarely take action. Most actions relate to extensions through year-end 2020 or March 2021 regarding the massive fiscal and monetary policy initiatives put into place during the spring of 2020.

A quick scan of the hyperlinks associated with each of the items above revealed only one item of real potential strategic interest: a speech by Christine Lagarde, the President of the European Central Bank the day after the ECB's most recent monetary policy meeting.

From the landing screen to clicking on the ECB speech, a total of less than 60 seconds had elapsed. It took less than 3 minutes to read the speech. It was time well spent when, at the end, this intriguing text appeared:

The important and intriguing contribution to the COVID-19 monetary policy framework relates to exchange rates. The President of the ECB is saying that exchange rates have "partly offset" the benefits of the massive monetary policy and economic support structures created by the ECB at the onset of the pandemic six months ago. Moreover, the central bank now is now focused on whether (or not) exchange rate dynamics will adversely impact monetary policy targets....and it will be ready to act accordingly.

Many have questioned what, if anything, central banks could additionally do to help generate economic stability if the pandemic delivers a second round of intensification during the winter months in the Northern Hemisphere. President Lagarde has intriguingly put on the table more proactive central bank engagement in foreign exchange markets. Scenario analysts globally need to start considering these options in their own assumptions and parameters for the next few months.

Conclusion: Accelerated insight formation can be achieved using a data-driven approach to insight discovery. Our PolicyScope Platform is at Phase I in development. During this phase, the automated analytics generate new, structured data from the words of the public policy process. This gives us momentum measurements and time series data useful to analysts and strategists who connect the dots faster and better because they navigate the public policy more efficiently.

We understand that interest and excitement about artificial intelligence solutions means many people are ready for enhanced cognition processes to do the reading for them. The good news is that we almost have enough data to start training machine learning and artificial intelligence solutions. Our patented alternative data will be powering trajectory trend projection. We will be anticipating outcomes automatically in the not too distant future.

In the meantime, readers using our platform....particularly junior analysts and geostrategic strategists...reap significant informational asymmetries relative to their counterparts. Our users this morning knew within 5 minutes that FX rates are more in play for European monetary policy than any other person or bot scanning the headlines and specialized newsletters.

Subscribe today to get started using our data. Our PolicyScope Platform will help you read smarter, connect the dots faster, and mobilize advanced technology to make your life easier.

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