Search
0
0
ECB − Preparing for a rate cut
Thu, Oct 2 2008, 16:36 GMT
by Søren Dijohn
Overview: The ECB left leading interest rates unchanged but is preparing for a rate cut. At the press conference they softened the tone on economic growth and stressed the downward risk to growth stemming from the financial turmoil. They also softened the tone on inflation and dropped their key policy phrase "On the basis of our assessment, the current monetary policy stance will contribute to achieving our objective", indicating that there has been debate on this in the Governing Council.
Details: The tone in the growth section was a lot softer than previously. Downside risks "have increased". Recent data now "clearly confirm that economic activity is weakening" and they added (for the first time) "with contracting domestic demand and tighter financing conditions". Previously the ECB stated that the economy "is currently experiencing an episode of weak activity". Now "lower oil prices and ongoing growth in emerging markets might support a gradual recovery in 2009. Finally, today they said that "the world economy as a whole is feeling the adverse effects of the financial market turmoil". This is clearly downbeat compared to the previous statement in which "growth in the world economy is expected to remain relatively resilient".
Published on Thu, Oct 2 2008, 16:40 GMT
Danske Bank
| Holmens Kanal 2-12, DK-1092 Copenhagen
http://www.danskebank.com/ | danskeresearch@danskebank.com
Legal disclaimer and risk disclosure
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector. This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange. Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.Interested in forex trading? forex brokerage firms!
FXstreet.com will give you a 3 months membership as soon as minimum rebates have been generated (€150 for private trader/ €300 for corporate trader)
[Read Premium full description]
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
©2008 "FXstreet.com. The Forex Market" All Rights Reserved.