Intra-Day Market Moving News and Views
25 Nov 2014
EUR/USD - ...... Comments by ECB Council member Christian Noyer who is speaking at the Paris EUROPLACE International Financial Forum in Tokyo said, quote:
'when policy rates go to zero, central banks must resort to unconventional measures to avoid involuntary policy tightening;
very low inflation can aggravate situation because this increases real interest rates;
monetary policy must aim at influencing both nominal rates and inflation expectations;
ECB's purchases of covered bonds, abs will ease bank funding conditions, bring down risk premiums on private assets;
ECB's action on nominal interest rates has been strong and efficient; governing council has unanimously stated commitment to using additional unconventional policy within its mandate if needed to fight low inflation; governing council made unanimous commitment to protect against misperception ECB is more tolerant of low inflation;
governing council statement on balance sheet size is not a firm commitment but an expectation;
governing council statement on balance sheet is clear indication further policy action will not be limited by quantitative restraints;
communication about balance sheet size can help bring inflation expectations more in line with ECB's definition of price stability;
Japan benefits from high wage flexibility, which helps competitiveness but may increase vulnerability to deflation;
in Europe, nominal wages are rigid and keep growing, which provides protection against deflation risk.'
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