ECB Preview: Draghi To Bid Adieu Amid Policy Split

Trading 23 oct 2019 Commentaire »

European Central Bank President Mario Draghi will be chairing his final monetary policy meeting on Thursday, but the savior of euro known for his buzzwords "whatever it takes", leaves behind a legacy marred by controversy.

Draghi, who is set to handover the reins of the ECB to former IMF Managing Director Christine Lagarde at the end of the month, is unlikely to announce any monetary policy change after the Governing Council meeting.

The Italian economist's departure comes at a time when growth in the 19-nation euro area is sagging and inflation is far away from the ECB's goal of "below, but close to 2 percent".

And it is this worrying economic picture that prompted Draghi to unveil a host of stimulus measures in September, the effectiveness of which are increasingly being doubted. The euro area economy is facing a prolonged sag than was expected earlier, he told lawmakers.

Under Lagarde, a former French finance minister, it is widely expected that there is likely to be a change in strategy in ECB monetary policy.

The latest stimulus package included a fresh round of bond purchases and a 10 basis points cut to the deposit rate to -0.50 percent as well as the introduction of a tiering system for reserve remuneration that will exempt part of banks' excess liquidity holdings from the negative deposit facility rate.

However, the stimulus measures failed to get the full backing of the Governing Council and the policy-making body has never seen such a major divide in views. The hawks on the Governing Council have been quite vocal this time. Much worse, the German member on the ECB Executive Board, Sabine Lautenschlager, quit her post late September. The German government on Wednesday nominated an economics professor Isabel Schnabel to the ECB executive board as the replacement for Lautenschlager. The ECB decision announcement is due at 7.45 am ET on Thursday and Draghi is set to begin his customary post-decision press conference at 8.30 am ET. The bank is widely expected to leave interest rates and stimulus measures unchanged, and reaffirm its forward guidance. Eurozone interest rates were raised last in July 2011 by 25 basis points and Draghi is set to be the only ECB chief thus far who did not raise interest rates.

Draghi's decisions also raised several eyebrows as he was bold enough to undertake several unconventional measures at the ECB, mainly asset purchases and negative interest rates, which were inconceivable in the euro area years ago. In the press conference, Draghi is likely to be grilled by reporters with questions over the divide in the Governing Council. However, he is widely expected to downplay such concerns. "We expect Draghi to come up with a strong (emotional) plea in support of the September package, probably combined with a broader attempt to safeguard the legacy of all measures taken under his leadership," ING economist Carsten Brzeski said. "Draghi will probably also stress the fact that the ECB's unconventional measures did have a significant impact on growth and inflation over the last few years, thereby justifying the September package."


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*U.S. Crude Oil Inventories Drop By 1.7 Million Barrels In Week Ended 10/18

Trading 23 oct 2019 Commentaire »

U.S. Crude Oil Inventories Drop By 1.7 Million Barrels In Week Ended 10/18


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Eurozone Consumer Confidence At 10-month Low

Trading 23 oct 2019 Commentaire »

Eurozone consumer confidence weakened more-than-expected in October to its lowest level in 10 months, preliminary data from the European Commission showed on Wednesday.

The flash consumer confidence index fell to -7.6 from -6.5 in September. Economists had forecast a score of -6.7.

The latest reading was the lowest since December, when it was -7.8.

The EU consumer confidence index shed 0.9 points to reach -7.3 in October.

The European Commission is set to release the final figure for consumer confidence along with the economic sentiment data on October 30.


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Euro Little Changed After Eurozone Consumer Sentiment Index

Trading 23 oct 2019 Commentaire »

At 10:00 am ET Wednesday, Eurozone flash consumer sentiment for October has been released. The euro changed little against its major counterparts after the data.

The euro was trading at 120.76 against the yen, 1.1123 against the greenback, 0.8630 against the pound and 1.1007 against the franc around 10:01 am ET.


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*Eurozone Flash Oct Consumer Confidence -7.6 Vs. -6.5 In Sept, Consensus -6.7

Trading 23 oct 2019 Commentaire »

Eurozone Flash Oct Consumer Confidence -7.6 Vs. -6.5 In Sept, Consensus -6.7


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NZ Dollar Climbs Against Majors

Trading 23 oct 2019 Commentaire »

The New Zealand dollar strengthened against its key counterparts in early New York deals on Wednesday.

The kiwi appreciated to 0.6414 against the greenback and 69.62 against the yen, from its early 2-day lows of 0.6386 and 69.16, respectively.

The kiwi firmed to near a 2-week high of 1.0675 against the aussie, after falling to 1.0710 at 5:30 pm ET.

The NZ currency was trading at 1.7344 against the euro, up from an early low of 1.7412.

Next key resistance for the kiwi is seen at 0.66 against the greenback, 73.00 against the yen, 1.05 against the aussie and 1.70 against the euro.


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*NZ Dollar Rises To Near 2-week High Of 1.0675 Against Aussie

Trading 23 oct 2019 Commentaire »

NZ Dollar Rises To Near 2-week High Of 1.0675 Against Aussie


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*NZ Dollar Strengthens To 0.6414 Vs U.S. Dollar

Trading 23 oct 2019 Commentaire »

NZ Dollar Strengthens To 0.6414 Vs U.S. Dollar


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Yen Retreats Against Majors

Trading 23 oct 2019 Commentaire »

The Japanese yen pulled back from its early highs against its major opponents in early New York deals on Wednesday.

The yen slipped to 108.54 against the greenback and 109.70 against the franc, from its early 8-day high of 108.25 and a 6-day high of 109.38, respectively.

Reversing from its early 2-day highs of 82.61 against the loonie and 69.16 against the kiwi, the yen weakened to 82.93 and 69.62, respectively.

The yen eased off to 120.77 against the euro, 139.91 against the pound and 74.36 against the aussie, from its previous 6-day highs of 120.39, 139.08 and 74.02, respectively.

Further weakness may take the yen to a support around 123.00 against the euro, 142.5 against the pound, 85.00 against the loonie, 73.00 against the kiwi, 76.5 against the aussie and 111.00 against both the greenback and the franc.


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*Yen Edges Down To 109.70 Against Franc

Trading 23 oct 2019 Commentaire »

Yen Edges Down To 109.70 Against Franc


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