European Central Bank cuts rates deeper into negative territory, relaunches asset-purchase program

Turkish Central Bank lowers interest rates 325 bps

Turkish Central Bank lowers interest rates 325 bps

The European Central Bank has unveiled fresh stimulus measures to bolster the eurozone, including cutting a key interest rate.

Thursday's moves also infuriated Trump, who just this week called on the U.S. Fed to adopt a negative-rate policy.

US President Donald Trump tweeted saying "The ECB is trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting US exports".

United States Treasury Secretary Steve Mnuchin told CNBC the European Central Bank rates change came as no surprise to Washington.

"The final showdown has started with a big bang".

The ECB also said it was re-starting quantitative easing.

The deposit facility rate, paid by banks on reserves parked at the ECB, was already negative, but has now been cut from minus 0.4% to minus 0.5%.

They said in a statement that they will cut the bank's deposit rate to minus 0.5 percent from minus 0.4 percent. The ECB changed its guidance on interest rates to say they'll stay at present or lower levels until the outlook for inflation "robustly" converges to its goal of just below 2%.

The "forward guidance" on rates abandons previous language naming mid-2020 as the earliest possible date for a rate hike.

Under the asset-purchasing programme, the bank will from 1 November make €20bn (£18bn) in asset purchases each month in an attempt to pump money into eurozone banks and encourage lending.

"The key point is that this commitment to more QE is open-ended", commented Andrew Kenningham of Capital Economics.

But governors stopped short of committing to the €600 billion of QE that Pictet Wealth Management strategist Frederik Ducrozet said could prove necessary.

Any steps by China and the U.S.to ease tensions ahead of face-to-face talks in Washington in the coming weeks would support sentiment as investors await monetary decisions from more of the world's major central banks. But will it be enough to revive the eurozone's embattled banks and inflation prospects?

The September package aims to buttress the eurozone against the impact of trade wars, especially between the United States and China, as well as weakening emerging markets and a looming no-deal Brexit.

All eyes now on ECB President Mario Draghi's press conference at 12.30 GMT.

Meanwhile, Germany's central bank warned in August that the country, which is considered the economic powerhouse of the bloc, could soon enter a recession.

Notícias recomendadas

  • Mystery Nintendo Switch exercise accessory is called Ring-Con, coming in October

    On Thursday, Nintendo released a seven-minute video about Ring Fit Adventure and the Ring Con. This will let them continue every day at an activity level that's comfortable for them.
    NASA joins ISRO to aid in establishing contact with Vikram moon lander

    NASA joins ISRO to aid in establishing contact with Vikram moon lander

    Minutes before its scheduled soft-landing, the communication with Vikram Lander was lost. The distance calculations would have helped Nasa plan its future moon missions better.
    Harry Potter author JK Rowling donates £15.3 million towards MS research

    Harry Potter author JK Rowling donates £15.3 million towards MS research

    Rowling has donated $19 million (£15.3 million) to fund scientists researching multiple sclerosis (MS) - the disease that killed her mother.
  • Retail inflation inches up to 10-month high of 3.21% in August

    Retail inflation inches up to 10-month high of 3.21% in August

    The expansion in the power generation sector stood at 4.8 percent in July, compared to 6.6 percent a year earlier. Factory output , as measured by the Index of Industrial Production (IIP), had expanded 6.5 percent in July 2018.

    Pound Euro exchange rate: GBP/EUR slumps as European Central Bank announces fresh stimulus package

    The ECB also eased the terms of its long term loans to banks and introduced a tiered deposit rate to help banks. European Central Bank cuts rates by 10bps, in-line with market expectations, announces new QE program.
    Don't interfere with our internal affairs, Hong Kong govt warns foreigners

    Don't interfere with our internal affairs, Hong Kong govt warns foreigners

    Three Hongkongers who remained inside the station were arrested. "This is not my Hong Kong". "Please support us in our fight". Chinese state media on Monday said Hong Kong was an inseparable part of China and any form of secessionism "will be crushed".
  • United Kingdom government downplays its own stark no-deal Brexit warning

    Scotland's highest court of appeal ruled that decision was unlawful on Wednesday, prompting calls for lawmakers to return to work. Supreme Court is set to consider next week whether the shutdown should be reversed, after conflicting rulings in lower courts.
    OPEC Cuts 2020 Oil Demand Forecast

    OPEC Cuts 2020 Oil Demand Forecast

    OPEC, Russia and other non-members agreed in December to reduce supply by 1.2 million bpd from January 1 this year. Analysts were looking for a 1.4 million barrel draw in gasoline and a 220,000 barrel rise in distillate supplies.
    Republicans have no idea what Trump wants them to do on guns

    Republicans have no idea what Trump wants them to do on guns

    Democrats are demanding a Senate vote on House-passed legislation that would expand background checks to all private sales. The outreach is the latest effort to try to traverse yet another impasse on gun control legislation.
  • Danish central bank expected to mirror ECB and cut key rate

    They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting USA exports. Mr Draghi is due to make way for incoming ECB President Christine Lagarde on 1 November.

    Juicy stat: Major League Baseball sets record for most home runs in a season

    Honestly, not all that much a big deal, but ... it's pretty amusing when you think about the record getting broken by an Oriole. Baltimore pitchers had allowed a league-leading 280 home runs this season before Villar hit his 21st long ball of the campaign.
    Johnson faces demands to recall MPs after Parliament suspension ruled unlawful

    Johnson faces demands to recall MPs after Parliament suspension ruled unlawful

    Supreme Court find that he intentionally misled the Queen during the process to suspend parliament for five weeks. A senior Conservative party M.P. who lost the whip last week has said "it's over for Boris Johnson" if the U.K.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.