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Feb 10, 2014

ECB bond-buy tool weakened by German court: ZEW chief

FRANKFURT (Reuters) – The European Central Bank’s flagship crisis-fighting tool has been severely blunted by the assertion of Germany’s top court that it exceeded the ECB’s mandate, the head of the German ZEW think tank said.

Germany’s Constitutional Court will refer a complaint against the plan to the European Court of Justice but, in an apparent attempt to direct the ECJ’s deliberations, said the scheme appeared to violate a ban on the ECB funding governments.

Feb 6, 2014

ECB holds rates at record low, puts focus on March

FRANKFURT, Feb 6 (Reuters) – The European Central Bank left
interest rates at a record low on Thursday but put markets on
alert for a possible move in March, acknowledging that
emerging-market turbulence could hit the euro zone.

Risks to the currency bloc’s economy remain skewed to the
downside, ECB President Mario Draghi said after interest rates
were held at 0.25 percent, and inflation would be low for a
protracted period.

Feb 6, 2014

ECB holds rates to assess deflation threat

FRANKFURT, Feb 6 (Reuters) – The European Central Bank left
interest rates unchanged on Thursday, holding off policy action
while it waits for new economic forecasts next month to assess
the deflation threat facing the euro zone.

A sharp drop in euro zone inflation to 0.7 percent in
January, well below the ECB’s target of just under 2 percent,
would have focused the minds of the bank’s policymakers.

Feb 6, 2014

Falling inflation puts ECB easing bias to test

FRANKFURT (Reuters) – European Central Bank policymakers meeting on Thursday face a dilemma after a surprise fall in inflation brought the euro zone closer to slipping into deflation, but with the growth outlook intact they might hold off on action for now.

Annual inflation in the currency bloc slowed to 0.7 percent in January, well below the ECB’s target of just under 2 percent, venturing deeper into what ECB President Mario Draghi has dubbed the danger zone.

Feb 4, 2014

Falling bank rates in euro zone periphery add to recovery hopes

FRANKFURT (Reuters) – The interest firms had to pay on loans ticked down in the euro zone in December, with southern European countries seeing the biggest falls, data showed on Tuesday, in a boost to the currency bloc’s crisis-hit states.

The European Central Bank can take some solace from the development as evidence that its efforts to repair the so-called “fragmentation” of credit markets across the euro zone is having some success.

Jan 24, 2014
via MacroScope

Will rounding cents bring euro zone down?


The 18-country euro zone has had a rough ride in the past 6 years, and even with the glimmers of good news reaching the darkest corners of the debt crisis, the European Central Bank has been anything but ready to sound a crisis-over siren.

Right after ECB President Mario Draghi warned against undue optimism, the central bank has identified a new threat to the common currency’s integrity – rounding up or down small change.

Jan 22, 2014

Despite tough talk, little sign of haste to act

FRANKFURT, Jan 22 (Reuters) – The European Central Bank
appears content to sit on its hands in the hope recovery unfolds
as neither of the red flags which could prompt it to act are
waving vigorously enough to worry it.

Earlier this month, ECB President Mario Draghi stepped up
his rhetoric, saying the central bank “strongly emphasised” its
accommodative stance and would take “decisive action” if
inflation undershoots or money market rates tighten in a way
that tightens policy by stealth.

Jan 21, 2014

New bank borrowing from ECB seen pushing euro zone market rates down

FRANKFURT, Jan 21 (Reuters) – Excess liquidity in euro zone
money markets is set to increase later this week after banks
took more cash from the European Central Bank, putting downward
pressure on short-term money-market rates.

Short-term interbank rates have climbed in recent weeks due
to falling excess liquidity – money banks have beyond what they
need for their day-to-day operations – and have reached levels
where they are putting pressure on the ECB to stop the rise.

Jan 21, 2014

German investor morale eases but stays close to near eight-year high

MANNHEIM, Germany (Reuters) – German analyst and investor sentiment unexpectedly cooled in January on slightly lower expectations for private consumption, but it remained near the highest level in nearly eight years.

The monthly ZEW think-tank survey, released on Tuesday, showed, however, that investors’ assessment of current conditions rose more than expected. ZEW said this confirmed high expectations of recent months for Europe’s largest economy.

Jan 9, 2014

ECB says determined to prevent too low inflation

FRANKFURT, Jan 9 (Reuters) – The European Central Bank said
on Thursday it was determined to use all available tools to
prevent inflation falling too low, but left interest rates
unchanged despite price rises slowing further into a “danger
zone” below 1 percent.

ECB President Mario Draghi told a news conference after a
monthly rate-setting meeting that the 18-nation euro zone may
experience a prolonged period of low inflation before a gradual
return to the ECB’s target level of just below 2 percent.

    • About Sakari

      "I am part of the Reuters team covering the European Central Bank. Before moving to Frankfurt in early 2009, I was based in Helsinki, where I wrote about the Finnish economy and paper industry."
      Joined Reuters:
      Finnish, English, German, Swedish
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