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)


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

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