ECB’s De Guindos: New measures to curb COVID-19 could lead to significant slowdown in Q4

Dhwani Mehta FXStreet

The new measures to curb COVID-19 resurgence could lead to a significant slowdown or even economic contraction in some European countries in the fourth quarter, the European Central Bank (ECB) Vice President Luis De Guindos said on Wednesday.

Additional comments

“Will update Spain's macroeconomic outlook in December.”

“Recent COVID-19 evolution measures to curb pandemic point to a worse projected economic scenario in Spain which points to a decline of 12.6% in 2020.”

“Support measures in Spain to cope with COVID-19 should be more selective and focus on helping people and sectors most affected”

“Spanish government has to be very cautious on measures leading to a permanent increase in levels of spending”

Measures to cope with COVID-19 could lead to a worse than expected debt-to-GDP ratio than foreseen in the Spanish budget plan”

“Calls for fiscal implementation in Spain in the medium term once COVID-19 pandemic has been left behind.”

“Spain's budget plan should include annual fiscal measures to reduce public deficit.”

“Key element of Spain budget plan should include an in-depth analysis of both revenues and spending.”

His comments come after the Spanish October Services PMI came in at 41.4 vs. 40.0 expected.

Market reaction

EUR/USD remains at the mercy of the US dollar dynamics, in the face of a tighter US election race.

The spot was last seen trading at 1.1670, down 0.32% on the day.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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