ECB President Mario Draghi’s ‘whole menu’ of monetary policy options to spur lending and boost euro area inflation from below zero appears to have few new dishes, if any at all.
A strong majority of forecasters say the ECB will announce in December an extension to its asset buying programme beyond the originally planned end date of September 2016, and maybe increase the size of its monthly purchases.
Those clamouring for the European Central Bank to ramp up its 60 billion euro per month stimulus programme will have to wait until December.
It just so happens that is not only when the ECB next takes a look at its growth and inflation forecasts, but it’s also when economists still expect the U.S. Federal Reserve to hike rates for the first time in nearly a decade.
(Reuters) – The European Central Bank will extend its stimulus program beyond September 2016, according to economists in a Reuters poll who were less decided on whether it would spend more than the current 60 billion euros a month in bond purchases.
Launched just over six months ago, the ECB’s quantitative easing program has so far done little to boost inflation, drive growth or even keep the euro low for a sustained period, the goals the central bank had hoped the stimulus would achieve.
U.S. manufacturing may be in trouble. Nearly all key indicators measuring the health of manufacturers in the world’s largest economy have disappointed over the past year.
If manufacturing remains a solid leading indicator of where the economy is headed, this spells bad news for the wider economy and prospects for a Federal Reserve interest rate hike any time soon.
(Reuters) – The U.S. Federal Reserve likely will pull the trigger and hike interest rates in December after taking a pass last week, according to economists polled by Reuters who assigned a 60 percent probability of it happening.
For months one of the most debated topics in global financial markets, the timing of the first rate hike in nearly a decade in the world’s largest economy has proven a tough call for forecasters and traders.
As anticipation builds ahead of the U.S. Federal Open Market Committee’s Sept. 16-17 meeting, the decision on whether rates will go up or not rests squarely on incoming economic data, according to Fed Chair Janet Yellen.
There are about 10 key releases in the run-up to the meeting, 6 this week that together could swing expectations for a hike this month, which still appear to be resting on a knife’s edge.
(Reuters) – The European Central Bank may be running out of road.
At the start of the year, the euro was plummeting and a fall in oil prices was supposed to give an additional boost to consumers in addition to its quantitative easing juicing the markets.
Now the euro is headed back up to where it was trading near the start of the year and inflation expectations are plummeting once again, with the latest print showing the headline number unchanged at just 0.2 percent in August.
“Nothing to see here, folks” was the reaction most analysts had to a completely shocking report earlier this week that showed manufacturing business conditions in New York State deteriorated at their fastest pace since the start of the financial crisis.
Economists went on to dispel concerns after the the Federal Reserve Bank of New York’s Empire State Index unexpectedly plunged almost 20 points to -14.92 that any similar weakness might turn up in the more closely-watched Philadelphia Fed data, due later on Thursday.
BENGALURU (Reuters) – Euro zone economic growth has slowed since the start of the year and inflation probably won’t reach the European Central Bank’s 2 percent target ceiling until at least 2017, a Reuters poll found.
The predictions come after six months of European Central Bank stimulus, making them disappointing reading for policymakers struggling to bolster growth and produce any meaningful rise in prices.
BENGALURU (Reuters) – The Reserve Bank of India (RBI) is unlikely to loosen policy before October, particularly with retail inflation at an eight-month high after food prices spiked, a Reuters poll of economists found.
All but four of 51 forecasters polled expect the RBI to hold its key repo rate at 7.25 percent on Aug. 4. It has already cut the rate three times this year to loosen credit and boost slowing growth in Asia’s third-largest economy.