Posts Tagged ‘euro’

The ECB delivers a bigger-than-expected package to support bank lending

The ECB’s Governing Council delivered a comprehensive policy package that exceeded market expectations by a large margin. The 10bp deposit rate cut to -0.40% was expected but other measures were not, including a 5bp ‘refi’ rate cut (to 0%), a EUR20bn increase in the pace of monthly asset purchases (to EUR80bn), the inclusion of non-bank […]

European monetary policy: new ECB easing package now likely to be announced in March

The ECB left all policy settings unchanged at today’s meeting, as widely expected. At the same time, the overall tone of the press conference reflected yet another significant dovish shift in the ECB’s communication – one that the Governing Council agreed on unanimously – strengthening our view that fresh easing measures are likely to be […]

Draghi speaks louder during ECB’s press conference

As expected, nothing concrete was announced yesterday. Nevertheless, Mario Draghi hinted at some interesting points, but it required reading between the lines. During the press conference the ECB president emphasised the central bank’s forward guidance. On several occasions he referred to the current low level of inflation and the risk of seeing this situation last longer: […]

Euro area: the Single Resolution Mechanism for the Banking Union is born

The Ecofin Council has finally reached an agreement on a general approach to a Single Resolution Mechanism (SRM) with the creation of a single decision body named the Single Resolution Board (SRB) and a Single Fund for the resolution of banks (SRF). The adoption of an SRM is a necessary element for the euro area […]

Germany and the rest of euro area exhibits an increasing divergence

Composite PMI: first increase after two month of decline In December, the flash euro area manufacturing PMI expanded by 1.1 points to 52.7, well above consensus expectations (51.9). By contrast, the flash euro area services PMI continued its downward trend by declining from 51.2 in November to 51.0 in December, below consensus expectations (51.5). As […]

Industrial production in the eurozone still in the doldrums

In contrast to the increase expected by consensus (0.3% m-o-m), eurozone industrial production (excluding construction) fell sharply by 1.1% m-o-m in October, recording the largest monthly decrease since September 2012 and its second successive month of contraction. The September figure was revised up from -0.5% m-o-m to -0.2% m-o-m. As a result, the October figure […]

Euro area: recession likely to prevail throughout the first half of the year

Manufacturing PMI worse than expected For the second month running, the manufacturing PMI showed a decrease. Indeed, the flash euro area manufacturing PMI dropped to 46.5 in April from 46.8 in March, below consensus expectations (46.7). By contrast, the flash euro area services PMI posted a slight rise of 0.2 point to 46.6 in April, […]

The ECB conducts a more cautious assessment

The tone during yesterday’s ECB press conference was slightly less upbeat than January’s. Accelerating disinflationary process, the impact of the euro’s strength, the fragility of confidence and the downside risks to the economic recovery, give the impression that the Governing Council has not closed the door for further easing measures. As we continue to be […]

Euro area: disastrous fourth quarter industrial production data confirmed

Euro area industrial production decreased in November, for the third month running, and reached its lowest since April 2010. Indeed, industrial production fell by 0.3% m-o-m in November, worse than the 0.2% m-o-m rise expected. The October figure was revised up marginally from -1.4% m-o-m to -1.0% m-o-m. Industrial production plunged for all periphery countries […]

EU summit: half measures and imperfect agreements will erode investors’ confidence

The agreement reached at last week’s EU Summit is close to the smallest common denominator. It is true that Mrs Angela Merkel had very little room to manoeuvre in an electoral year, but the consequence is that the euro area integration is moving forward with only half measures and imperfect solutions. The risk is that the […]

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