Barclays | Both ECB’s Vice President Constancio and Chief Economist Praet warned of a potential macroeconomic impact of Paris terrorist attacks last Friday although the noted that these types of events generally have a transitory effect on the economy.
BARCLAYS | The minority conservative government led by Prime Minister Pedro Passos Coelho was ousted present week after the parliament rejected his government’s programme by a vote of 123 to 107. Political uncertainty is likely to continue to weigh on Portugal’s funding costs, despite the very accommodative monetary policy of the ECB.
Markets are trying to glean any hint about whether or not the ECB will confirm additional stimulus during its monthly meeting today. Most analysts forecast a QE reinforcement in quantity, as well as in term, before year-end or in 2016. But there is also a minority who bet on the central bank just adding corporate debt to the cocktail.
PARIS | Francesco Saraceno | What I’d like to express here is my jealousy for the discussions (and the confrontation) that we observe in the US about rate rises. These discussions are a sideproduct, a very positive one if you ask me, of the institutional design of the Fed.
Fernando Barciela | The central bank has put QE in place, a trillion euros asset purchase programme, but inflation has returned to negative territory. Has the ECB’s strategy failed? Are critics right when they say it does too little, too late.
Estimations for the Eurozone’s inflation in September have been met: prices turned negative again after six months above zero. Some analysts think this time “the ball in not in the ECB’s court”.
Even if money supply growth in the eurozone slowed by 0.5% to 4.8% in August, credit to households increased by 1% to 1.4%. In particular, mortgage loans rose 1.6% compared to July.
While Yellen bet on increasing rates, China’s slowdown concerns Draghi, but he is not considering further stimulus for the time being, says Gabriel Marqués at Intermoney.
Are we putting the responsilibity of exiting the crisis on central banks’ shoulders? Is ECB’s president Mario Draghi doing traders a favour by playing down the ECB’s responsibility for contributing to volatility? Professor of Financial Mathematics at Bocconi’s University Marcello Minenna answers to these questions from Milan and argues that a low interest rate environment is here to stay.
By James Alexander via Historinhas | Another day another proof of the immediate impact of active monetary policy in altering NGDP growth expectations and therefore setting the flight path to a different future.