Sunday, 22 September 2019
Jakarta
--:--
Tokyo
--:--
Hongkong
--:--
New York
--:--
ECB Strengthens Stimulus to Boost Euro Area Amid Inflation Slump
Thursday, 6 June 2019 19:15 WIB | FISCAL & MONETARY | ECBMoneterMonetary

The European Central Bank stepped up support for the euro-area economy by extending its pledge to keep interest rates at record lows, while also reaching agreement on how to infuse lenders with more cheap cash.

The Governing Council, which met in Vilnius, now expects borrowing costs to stay on hold at least through the first half of 2020, or six months longer than previously. The cost of long-term bank loans can fall as low as the deposit rate, currently minus 0.4%, plus 0.1 percentage point.

The euro was trading 0.4% higher at $1.1260 at 1:54 p.m. Frankfurt time. German bond yields rose.

The ECB™s move echoes dovish turns by central banks elsewhere as the global economy is buffeted by trade tensions. Australia cut interest rates on Tuesday for the first time in three years, the U.S. Federal Reserve has signaled an openness to easing if necessary, and the Bank of Japan might add stimulus. India reduced its key rate on Thursday and changed its stance to accommodative.

President Mario Draghi will hold a press conference at 3:30 p.m. Vilnius time to present updated economic forecasts and elaborate on the Governing Council™s discussions.

Policy makers also agreed on the terms for a new round of long-term loans to banks, which will be offered starting in September. The long-term loans to banks will initially be priced at the main refinancing rate plus 0.1 percentage point, but can fall lower if banks meet lending quotas, according to the statement.

The ECB™s actions might be the last salvo for Draghi, who retires in October. A decision on his successor has yet to emerge from haggling among European politicians.

Recent euro-zone economic data have been mixed, and in some cases signal the slowdown may be bottoming out. Figures on Thursday morning showed German factory orders rising for a second straight month in April, and euro-zone GDP was confirmed as being fairly robust in the first quarter, led by investment and household spending.

Still, inflation has weakened and market-based inflation expectations are at their lowest since 2016. Before Thursday™s meeting, investors were betting on a cut in the deposit rate next year, and some economists suggested QE could be restarted.

Source: Bloomberg

RELATED NEWS
Bank of England leaves policy rate unchanged at 0.75% as expected...
Thursday, 19 September 2019 18:28 WIB

In a widely expected decision, the Bank of England's Monetary Policy Committee held the policy rate unchanged at 0.75% with a unanimous vote. The asset purchase facility remained steady at €435 bill...

SNB leaves key rate unchanged at -0.75%, USD/CHF eases-off 3-month tops...
Thursday, 19 September 2019 14:54 WIB

At its September quarter monetary policy assessment held this Thursday, the Swiss National Bank (SNB) board members decided to leave the monetary policy settings unchanged. The SNB left the benchmark...

BOJ keeps policy steady, signals chance of easing in October...
Thursday, 19 September 2019 10:47 WIB

The Bank of Japan kept monetary policy steady on Thursday but said it would re-examine economic and price developments more thoroughly at its next policy meeting, signalling the chance of expanding st...

Fed Makes Second Straight Rate Cut, Splits on Further Action...
Thursday, 19 September 2019 01:20 WIB

Federal Reserve policy makers lowered their main interest rate for a second time this year while splitting over the need for further easing, caught between uncertainty over trade and global growth and...

RBA Sees Risk of Property-Price Spike as House-Building Dwindles...
Tuesday, 17 September 2019 09:03 WIB

Australia's central bank said there's potential for an upswing in home prices as dwelling construction weakens, while reiterating it's prepared to lower interest rates further. In minutes of its Sept...

LATEST NEWS
Hong Kong Stocks Close Down

Hong Kong stocks ended the week with another loss Friday as investors fret over the impact of weeks of sometimes violent protests on the city's economy. The Hang Seng Index slipped 0.13 percent, or 33.28 points, to 26,435.67. The benchmark...

Wall Street Falls as Trade Optimism Fizzles

Wall Street dropped on Friday after a Chinese agriculture delegation canceled a planned visit to Montana next week, dampening optimism about U.S.-China trade talks. The Dow Jones Industrial Average fell 160.19 points, or 0.59%, to 26,934.6, the...

U.S. Oil Prices Up 6% For The Week, Biggest Weekly Gain in 3 Months

Oil futures ended lower on Friday, but tallied a gain of almost 6% for the week, the largest such rise in three months. As the Saudis reveal the extent of damages from the attacks on oil facilities last weekend, "the market mood has shifted to...

POPULAR NEWS
Gold Marks First Loss in 4 Sessions
Friday, 20 September 2019 01:13 WIB

Gold futures settled with a loss on Thursday, their first in four sessions, a day after the Federal Reserve announced a widely expected cut in...

Hong Kong Stocks End With Fresh Losses
Friday, 20 September 2019 03:36 WIB

Hong Kong stocks fell for a fourth day in a row Thursday after the Federal Reserve cut interest rates but investors were left guessing about the...

Gold Stands Tall Above $1,500 After Fed as Palladium Hits Record
Friday, 20 September 2019 16:00 WIB

Gold headed for the first weekly advance in four as mounting economic headwinds and monetary easing stayed in focus after this week's mixed...

Gold Prices Fall After Fed Meeting, Still Above $1,500 Level
Thursday, 19 September 2019 13:09 WIB

Gold prices were down on Thursday in Asia following the conclusion of the U.S. Federal Reserve's two-day monetary policy meeting. Gold Futures for...