ECB
ECB Retains Enhanced Credit Support and Key Rate Structure
September 2, 2010
The Governing Council made no change in the configuration of its short-term interest rates. They are a 1.0% refinancing rate flanked symmetrically by a 0.25% deposit rate and a 1.75% marginal lending rate. The refinancing rate has been steady for the past 16 months, having earlier been cut in seven steps from 4.25% prior to [...] More
Pound Softer Following Some Poor Data, Investors Await ECB
September 2, 2010
Sterling fell 0.4% against the dollar, which otherwise is down 0.4% against the kiwi, 0.3% versus the yen and Swissy, and 0.1% against the euro. The dollar edged 0.1% higher against the Aussie dollar and is steady relative to the Canadian dollar. In Britain, the Nationwide house price index dropped 0.9% last month, three times [...] More
Pundits Digesting Nuances of Signals from the Fed, Bank of Japan and ECB
August 31, 2010
Among the most telling comments in the August FOMC minutes is the sentence, “Members generally saw both employment and inflation as likely to fall short of levels consistent with the dual mandate for longer than had been anticipated.” Often with a mandate to maintain price stability but also maximize jobs, there is a conflict with [...] More
A Boring ECB Statement and Press Conference
August 5, 2010
The ECB Governing Council retained its interest rate structure: a 1.0% refinancing rate flanked by a 0.25% deposit rate and a 1.75% marginal lending rate. This rate structure has been in place for 15 months thus far. Today’s do-nothing decision was universally expected. It will be a long time before the currently “appropriate” stance gets [...] More
Preview: Thursday’s ECB and Bank of England Decisions
August 4, 2010
Neither the ECB nor the Bank of England will change their respective key rates of 1.0% and 0.5%. There has not been a rate change since March 2009 in Britain’s case or May of last year at the ECB. The Bank of England reached the ceiling of its Gbp 200 billion asset purchase plan in [...] More
Trichet Spouts Same Old Stuff
July 8, 2010
European monthly statements evolve much more slowly and smoothly than market perceptions. Traders don’t like the monotony of these monthly staged events but feel compelled to stay tuned, lest Trichet utter a market-moving surprise. In the first hour following the start of today’s conference, the euro had appreciated fractionally further against the dollar, challenging but [...] More
Mixed U.S. Dollar Ahead of ECB Press Conference
July 8, 2010
Against commodity-sensitive currencies, the dollar has lost 1.0% versus the Aussie dollar, 0.5% against the kiwi, and 0.2% relative to the loonie. The dollar has on the other hand risen 0.5% against the yen, 0.4% against sterling and 0.1% vis-a-vis the Swiss franc. EUR/USD is steady. Stocks in the Pacific Rim advanced by 2.4% in [...] More
Some Better News From Europe
June 30, 2010
At the ECB’s 3-month tender, banks only requested EUR 131.9 billion of liquidity to replace EUR 442 billion of maturing one-year funds. This lower-than-projected amount results in a EUR 310 billion net withdrawal, suggesting banking sector strains may not be as severe as imagined. British business investment last quarter rose 7.8% and was 7.7% lower [...] More
FOMC
June 23, 2010
One source of the dollar’s strength against the euro since late November has been a perception that the Fed will begin raising interest rates well ahead of the ECB. If this premise were prescient, it should only be meaningful from a market standpoint if the onset of Fed tightening were six to nine months away. [...] More
Latest ECB Tactics Not Helping Euro Stabilize
May 6, 2010
As expected, the ECB Governing Council left its three rates unchanged and where such have stayed for the past 12 months: a 1.0% refinancing rate flanked symmetrically by a 0.25% deposit rate and a 1.75% marginal lending rate. Forex dealers responded to an ECB strategy of not appearing to be panicking and instead emphasizing continuity [...] More
