This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/live/2019/jul/25/investors-ecb-european-central-bank-economic-stimulus-brexit-interest-rates-euro-sterling-pound-dollar-business-live
The article has changed 8 times. There is an RSS feed of changes available.
| Version 5 | Version 6 |
|---|---|
| Euro hits two-year low after ECB signals future stimulus – business live | Euro hits two-year low after ECB signals future stimulus – business live |
| (32 minutes later) | |
| As Draghi finished speaking US stock markets moved lower at the open. | |
| The Nasdaq composite fell by 0.36%, the S&P 500 lost 0.14% and the Dow Jones industrial average lost 0.04%. | |
| “I am not available” to swap roles with Christine Lagarde to become the head of the International Monetary Fund, Draghi says. It’s not an issue. | |
| And in response to US President Donald Trump’s complaints about “currency manipulation”, Draghi says he does not target the exchange rate as part of his mandate. | |
| A question on Libra, Facebook’s planned digital currency. Draghi was clearly prepared for it, as he read a long list of concerns from his notes. | A question on Libra, Facebook’s planned digital currency. Draghi was clearly prepared for it, as he read a long list of concerns from his notes. |
| Libra was not an issue for the governing council but was discussed quite extensively in the G7, Draghi says. There was a pretty unanimous view that there were concerns as well as interest. | Libra was not an issue for the governing council but was discussed quite extensively in the G7, Draghi says. There was a pretty unanimous view that there were concerns as well as interest. |
| They were: cybersecurity, anti-money laundering, terrorism, criminal use, privacy, tax evasion, monetary policy transmission, financial stability and the possibility of changes to the global payments system. | They were: cybersecurity, anti-money laundering, terrorism, criminal use, privacy, tax evasion, monetary policy transmission, financial stability and the possibility of changes to the global payments system. |
| These need to be addressed before regulators will allow Libra, Draghi says. That’s quite the to-do list for Facebook boss Mark Zuckerberg. | These need to be addressed before regulators will allow Libra, Draghi says. That’s quite the to-do list for Facebook boss Mark Zuckerberg. |
| A year ago many economists thought Draghi would leave Frankfurt with his first rate hike. That has been proven almost certainly wrong, but there might still be some action before he leaves. | A year ago many economists thought Draghi would leave Frankfurt with his first rate hike. That has been proven almost certainly wrong, but there might still be some action before he leaves. |
| Wolfgang Bauer, fixed income manager at M&G Investment, said: | Wolfgang Bauer, fixed income manager at M&G Investment, said: |
| Mario Draghi’s ECB presidency is likely to end not with a whimper but a bang. After revising forward guidance today, an interest rate cut at the ECB’s upcoming monetary policy meeting in September seems highly likely. In addition, the odds of a revival of net asset purchases have increased significantly. | Mario Draghi’s ECB presidency is likely to end not with a whimper but a bang. After revising forward guidance today, an interest rate cut at the ECB’s upcoming monetary policy meeting in September seems highly likely. In addition, the odds of a revival of net asset purchases have increased significantly. |
| Market reactions once again proved that central banks currently trump any economic woes. And these have been mounting in Europe: Not long before the ECB’s announcement today, and hardly registered by market participants, the Ifo Pan Germany Business Climate Index had dropped to its lowest reading since April 2013. The danger is that investors become too complacent, relying fully on accommodative monetary policy, and ignore the late-cycle risks that are lingering in the background. | Market reactions once again proved that central banks currently trump any economic woes. And these have been mounting in Europe: Not long before the ECB’s announcement today, and hardly registered by market participants, the Ifo Pan Germany Business Climate Index had dropped to its lowest reading since April 2013. The danger is that investors become too complacent, relying fully on accommodative monetary policy, and ignore the late-cycle risks that are lingering in the background. |
| What will Mario Draghi do after his term ends on 31 October? | What will Mario Draghi do after his term ends on 31 October? |
| I haven’t come to a determination, he says, rather boringly. | I haven’t come to a determination, he says, rather boringly. |
| He’s slightly more interesting on his successor, former International Monetary Fund boss Christine Lagarde. | He’s slightly more interesting on his successor, former International Monetary Fund boss Christine Lagarde. |
| I think she will be an “outstanding president of the ECB”, Draghi says. | I think she will be an “outstanding president of the ECB”, Draghi says. |
| The euro is back at about $1.117 against the US dollar, as Draghi sounds less dovish than the statement suggested. | The euro is back at about $1.117 against the US dollar, as Draghi sounds less dovish than the statement suggested. |
| #EUR is taking back gains as Draghi continues to sound less dovish than expected today. No discussion at all on rate cuts can be treated as a lack of urgency on the #ECB side. https://t.co/7BE5xb7IGj | #EUR is taking back gains as Draghi continues to sound less dovish than expected today. No discussion at all on rate cuts can be treated as a lack of urgency on the #ECB side. https://t.co/7BE5xb7IGj |
| The recession risk is still pretty low, Draghi says, pointing to high employment and other factors which boost spending. | The recession risk is still pretty low, Draghi says, pointing to high employment and other factors which boost spending. |
| However, manufacturing is struggling, he acknowledges, with spillovers to other sectors of the economy. | However, manufacturing is struggling, he acknowledges, with spillovers to other sectors of the economy. |
| If the worsening outlook continues fiscal policy support will be needed, Draghi says. | If the worsening outlook continues fiscal policy support will be needed, Draghi says. |
| *A previous post was edited to correct a typo. Please refresh to see the correct version. | *A previous post was edited to correct a typo. Please refresh to see the correct version. |
| Looks as no unanimity achieved on the next big monetary stimulus package. #ECB’s Draghi: Convergence of views, rather than unanimity among ECB policy makers. Says different nuances of views on parts of package, but committees received broad mandate. pic.twitter.com/n1Wv4nvBo9 | Looks as no unanimity achieved on the next big monetary stimulus package. #ECB’s Draghi: Convergence of views, rather than unanimity among ECB policy makers. Says different nuances of views on parts of package, but committees received broad mandate. pic.twitter.com/n1Wv4nvBo9 |
| Strong language. Above market expectation. #ECB #qe #stimulus https://t.co/okzf5N00xb | Strong language. Above market expectation. #ECB #qe #stimulus https://t.co/okzf5N00xb |
| We want to see the next projections before taking action, Draghi says. That sets September as a clear date for any move. | We want to see the next projections before taking action, Draghi says. That sets September as a clear date for any move. |
| Such complex action (interest rate cuts, quantitative easing, and a possible “tiering” system, which excludes some banks from certain rate cuts to protect them from costly negative rates) need a lot of preparation, he said. | Such complex action (interest rate cuts, quantitative easing, and a possible “tiering” system, which excludes some banks from certain rate cuts to protect them from costly negative rates) need a lot of preparation, he said. |
| “We don’t like what we see on the inflation front,” Draghi says, talking about the new “symmetry” commitment which would allow them to look past a temporary bump in headline inflation. | “We don’t like what we see on the inflation front,” Draghi says, talking about the new “symmetry” commitment which would allow them to look past a temporary bump in headline inflation. |
| There is no cap at 2% inflation, he says. | There is no cap at 2% inflation, he says. |
| The governing council will act with the same determination whether inflation is above or below the 2% target, he adds. | The governing council will act with the same determination whether inflation is above or below the 2% target, he adds. |
| There was no discussion of cutting rates as soon as today, Draghi says. | There was no discussion of cutting rates as soon as today, Draghi says. |
| Some of the governing council had different answers on different parts of the package, Draghi says (but they eventually converged). | Some of the governing council had different answers on different parts of the package, Draghi says (but they eventually converged). |
| First question finally done. | First question finally done. |
| This has to be Draghi's longest answer ever... and it's only the 1st question. #ECB | This has to be Draghi's longest answer ever... and it's only the 1st question. #ECB |
| The lingering uncertainty on various geopolitical questions is itself a realisation of one of the risks to growth, Draghi says. | The lingering uncertainty on various geopolitical questions is itself a realisation of one of the risks to growth, Draghi says. |
| He goes through the statement in some more detail, emphasising the easing bias in the notes. There is “a consistent degree of optionality” in the statement, he says. | He goes through the statement in some more detail, emphasising the easing bias in the notes. There is “a consistent degree of optionality” in the statement, he says. |
| If the medium term inflation outlook falls short, the ECB is determined to act, he says, pointing to new developments in their thinking. With muted inflation, that spells rate cuts. | If the medium term inflation outlook falls short, the ECB is determined to act, he says, pointing to new developments in their thinking. With muted inflation, that spells rate cuts. |
| Was the decision unanimous to pre-announce an interest rate cut in September? | Was the decision unanimous to pre-announce an interest rate cut in September? |
| There was “broad agreement” on the assessment of the current economic outlook, Draghi says. | There was “broad agreement” on the assessment of the current economic outlook, Draghi says. |
| The outlook is getting “worse and worse in manufacturing especially”, Draghi says, in a nod to recent data showing the German economy is struggling. | The outlook is getting “worse and worse in manufacturing especially”, Draghi says, in a nod to recent data showing the German economy is struggling. |
| Trade wars and, bingo, a hard Brexit, are also risks to the outlook, he says. | Trade wars and, bingo, a hard Brexit, are also risks to the outlook, he says. |
| Past projections suggested there would be a rebound in the second half of the year; this is less likely now, he says. | Past projections suggested there would be a rebound in the second half of the year; this is less likely now, he says. |
| Summing up his opening statement, Draghi makes it clear that loose policy is here to stay, and follows with his standard call for some help from governments on the fiscal side. | Summing up his opening statement, Draghi makes it clear that loose policy is here to stay, and follows with his standard call for some help from governments on the fiscal side. |
| “An ample degree of monetary accommodation is still necessary” to support the European economy Draghi says. | “An ample degree of monetary accommodation is still necessary” to support the European economy Draghi says. |
| He asks for a more growth-friendly balance of fiscal policies. | He asks for a more growth-friendly balance of fiscal policies. |
| And now on to the questions. | And now on to the questions. |