Summary for the 25th of January 2019


The Governing Council of the ECB keeps the interest rate unchanged at 0%, as expected by the market. It expresses that the risks for an economic downturn have become higher. The members of the council all agreed that the risks for a downturn are higher, but not all members agreed about how long these risks will last. Some of the members believe that a Brexit solution, The Chinese government’s measures to address the slowdown, and the rebound from the car industry in Germany, all these will help reduce the risks of an economic downturn. Other members see the downward trend in macroeconomics indicators in these past months, and believe that they will lead to reduce sentiments in the EU’s monetary policy and in the economy. Because of the disagreement, the council decides that there will be no change in the monetary policy in the EU.

The council needs more time to assess the risks for a downturn and signs for growth and inflation, and how long potential risks will last. At the press conference, the President of the European Central Bank, Mario Draghi says that these assessments are important for deciding the monetary policy, and that at the moment the probability of an expansionary policy is higher than of a contractionary one. The  expansionary policy can be clearer signals to the market, for example about keeping the interest rate low for a longer period of time, and continue reinvesting, in full, the principal payments from maturing securities. The ECB pinpoints that there will be no changes in the interest rate until after the summer.

Indices on 24th and 25th  of January: Due to positive comments about next week's trade talk between the U.S and China, the Asian markets have made a positive close.

Dow: -0.1% (24th)
S&P 500: +0.1% (24th )
Nasdaq: +0.7% (24th)
Nikkei: +1.0% (25th)
Chinese indices: +1.6% (25th)


 If you are looking for a course in finance, check out my video course in Portfolio Analysis:

Quick and Easy Portfolio Analysis Video Course  (Skillshare)

 Quick and Easy Portfolio AnalysisVideo Course  (Udemy)

and Facebook page for other information:

Quick&Easy Finance

Next update will be on Monday the 28th of January.

Comments

Post a Comment

Popular posts from this blog

Summary for the 2nd of October -Weaker manufacturing outlook

Last week’s flash PMI estimates for the EU area and yesterday’ final PMI numbers are indicating that the weakening in the manufacturing sector isn’t country specific, but rather the weakening is across countries. The decline in Germany’s manufacturing sector is less than expected by the financial markets, while the decline in France is higher than expected. The same goes for Spain and Italy. The UK’s PMI index has increased by 0.9 to 48.3 and is more than expected, though 48.3 still indicates a weaker outlook. The US Manufacturing PMI has increased to 51.1 while the ISM index declines by 1.3 percent to 47.8, the lowest value since 2009. Despite weakening activities in the manufacturing sector for the developed countries, for the developing countries the outlook is still positive. The global PMI value in the manufacturing sector has risen from August to September. Past months’ decline has been due to weaker growth in the global trade. The WTO has updated its global trade forecast
Read more

Summary for the 15th of October

China’s balance of trade shows a fall in exports by 3.2 percent, comparing to a year ago and the imports fall by 8.5 percent, the first fall since May this year. China is the largest contributor to world economic growth, through the weaker imports, China’s economic decline is affecting the rest of the world economy, such as the Euro area. The Euro area’s industrial production for  August has risen by a little more than the markets have expected. The industrial production in the Euro area has been weakening since the start of 2018. Finland is currently holding the council of the EU presidency. At a press conference with the European Council President elect, Charles Michel, the Finnish prime minister, Antti Rinne, says that The EU needs more time to reach a Brexit agreement. Boris Johnson is hoping to seal a Brexit deal before the EU summit on Thursday, so that he will be able to present it to the British Parliament on Saturday for approval, in doing so, he won’t need to postpone B
Read more

Summary for the 21st of October Brexit drama

On Saturday, the British parliament is withholding the final decision of the revised Brexit deal and forcing Boris Johnson to ask the European Council for an extension to the 31 st of January. Instead the parliament has greed on Oliver Letwin’ amendment, which states that there wont be a no deal Brexit until the parliament has agreed on the revised Brexit deal this week. And on Saturday night, Boris Johnson has sent an unsigned letter to the European Council asking for a Brexit delay as well as a personal letter to the Council asking the EU leaders not to delay Brexit. The US stock exchange has closed in negative on Friday after Johnson & Johnson has to recall 33 000 bottles of baby powder in the US after health regulators found trace amounts of asbestos in a bottle purchased online. Boeing has admitted that two of its employers in 2016 misled the FAA about the 737 Max and its technical system. Weaker than expected Chinese economic indicators also contributes to the negative
Read more