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  • 18 May 2020, 06:19
    ECB chief economist Lane: Euro zone economy won't hit pre-crisis level until 2021 at earliest

    Reuters reports that the coronavirus-hit euro zone economy probably will not return to its pre-pandemic levels until next year at the earliest, the European Central Bank's chief economist told El Pais newspaper, adding that the ECB was prepared to tweak its tools if needed.

    "From today's perspective, it looks in any case unlikely that economic activity will return to its pre-crisis level before 2021, if not later," Philip Lane said in the interview published on the ECB's website.

    Lane said the ECB was constantly monitoring the situation and was ready to adjust all of its instruments if that proved necessary. He added that the ECB's Pandemic Emergency Purchase Programme, also known as PEPP, could be adjusted.

    He said the ECB was analysing the situation ahead of the upcoming June meeting, adding: "If we see that financial conditions are too tight, or the pressure on individual bond markets is not reflecting economic fundamentals, we can adjust the size or duration of our purchases, which we can anyway allocate flexibly over time and market segments."

  • 14 May 2020, 08:41
    ECB Economic Bulletin: Survey indicators suggest a sharp contraction in economic growth and a profound deterioration in labour market conditions

    • The euro area is facing an economic contraction of a magnitude and speed that are unprecedented in peacetime.

    • Measures to contain the spread of the coronavirus (COVID-19) have largely halted economic activity in all the countries of the euro area and across the globe.

    • Euro area GDP could fall by between 5% and 12% this year, depending crucially on the duration of the containment measures and the success of policies to mitigate the economic consequences for businesses and workers.

    • As the containment measures are gradually lifted, these scenarios foresee a recovery in economic activity, although its speed and scale remain highly uncertain.

    • The variability depends on the duration of lockdown measures, success of policies

    • Headline inflation is likely to decline further in the coming months

    • An ample degree of monetary accommodation is necessary for the robust convergence of inflation to levels that are below, but close to, 2% over the medium-term

  • 14 May 2020, 07:55
    BOJ governor Kuroda: It is not necessary to cut rates further now

    • But there is still room to cut rates further if needed

    • BOJ will not hesitate to ease further if needed

    • BOJ has many tools, measures to deploy if needed

    • Does not think that price target will be met soon

    • BOJ may have to continue easing in the coming years

    • Financial system remains stable

  • 12 May 2020, 09:56
    ECB Governing Council member Kazimir: European Court of Justice has sole authority over ECB actions

    • EU governments are not matching the ECB's efforts

    • EU fiscal response to the crisis is inadequate

    • Not opposed to increasing PEPP size, but decision should be based on data

    • No urgency to increase purchases, must examine how easing of lockdown measures are impacting the economy

  • 12 May 2020, 09:19
    Negative rates in the UK ‘quite possible,’ BOE deputy governor says

    CNBC reports that according to Deputy Governor for Monetary Policy Ben Broadbent, the U.K. may be headed toward negative interest rates at impending Bank of England monetary policy meetings.

    The BOE's Monetary Policy Committee (MPC) voted to hold interest rates at a historic low of 0.1% last Thursday, having cut rates twice from 0.75% since the start of the coronavirus pandemic.

    "The committee are certainly prepared to do what is necessary to meet our remit with risks still to the downside," Broadbent told CNBC on Tuesday.

    "Yes, it is quite possible that more monetary easing will be needed at the time."

    Along with the two previous rate cuts, the Bank has also announced £200 billion of new quantitative easing, bringing its bond buying program to a total of £645 billion.

  • 11 May 2020, 06:16
    ECB executive board member Schnabel: ECB stands ready to adjust size and duration of PEPP

    • ECB measures form a powerful package

    • Rating downgrades may be a risk to policy discussion

    • ECB has not discussed impact of rating downgrades on purchases

  • 7 May 2020, 09:08
    BOE governor Bailey: We are not out of monetary policy tools

    • We will continue to come up with appropriate responses

    • BOE is clearly committed to take action when needed

    • Appropriate that BOE continues with aggressive pace of QE for the moment

    • We will take stock of that, there's still another meeting before QE completion

    • Information about lifting lockdown measures will be material to June discussions

  • 7 May 2020, 07:28
    ECB vice president Luis de Guindos: ECB stands ready to make further adjustments to current measures

    • ECB constantly monitoring the situation

    • ECB policy has provided crucial support to the economy

    • Inflation will likely fall further in the next few months

    • PEPP helping to forestall undue tightening of financial conditions

    • Fiscal actions are the first line of defense

  • 7 May 2020, 06:15
    Bank of England leaves bank rate unchanged at 0.10%

    • The Bank of England's Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. In that context, its challenge is to respond to the severe economic and financial disruption caused by the spread of Covid-19.

    • At its meeting ending on 6 May 2020, the MPC voted unanimously to maintain Bank Rate at 0.1%.

    • The Committee voted by a majority of 7-2 for the Bank of England to continue with the programme of £200 billion of UK government bond and sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, to take the total stock of these purchases to £645 billion.

    • Two members preferred to increase the target for the stock of asset purchases by an additional £100 billion at this meeting.

    • The spread of Covid-19 and the measures to contain it are having a significant impact on the United Kingdom and many countries around the world.

    • Activity has fallen sharply since the beginning of the year and unemployment has risen markedly.

    • Economic data have continued to be consistent with a sudden and very marked drop in global activity.

    • Oil prices have been volatile.

    • There have, however, been tentative signs of recovery in domestic spending in China, and this is likely to be echoed in other countries that have started to relax Covid-related restrictions on economic activity.

    • Financial markets have recovered somewhat over recent weeks and risky asset prices have picked up from their lows in mid-March. This in part reflects the actions taken by authorities in the United Kingdom and elsewhere. Global financial conditions have, nevertheless, remained tighter than prior to the outbreak of Covid-19.

    • The timeliest indicators of UK demand have generally stabilised at very low levels in recent weeks, after unprecedented falls during late March and early April.

    • Payments data point to a reduction in the level of household consumption of around 30%.

    • Consumer confidence has declined markedly and housing market activity has practically ceased.

    • CPI inflation declined to 1.5% in March and is likely to fall below 1% in the next few months, in large part reflecting developments in energy prices.

    GBP/USD jumps to 1.2380 post-BoE announcement.
  • 6 May 2020, 08:24
    ECB governing council member Muller: ECB certainly able to show that policy measures are proportionate

    • ECB needs to discuss how to offer certainty to the court

    • ECB hasn't yet discussed whether to buy junk bonds

  • 5 May 2020, 08:16
    ECB governing council member Weidmann: A rapid and strong economic recovery is quite unlikely

    • Germany is in a severe economic recession

    • Economy can recovery sustainably once the pandemic has been overcome

    • Should not lose sight of eventual exit from stimulus measures

  • 4 May 2020, 08:24
    ECB survey: economists see eurozone GDP contracting by 5.5% this year
    • 2020 GDP growth forecast -5.5% (previously +1.1%)

    • 2021 GDP growth forecast +4.3% (previously +1.2%)

    • 2022 GDP growth forecast +1.7% (previously +1.4%)

    • 2020 inflation forecast +0.4% (previously +1.2%)

    • 2021 inflation forecast +1.2% (previously +1.4%)

    • 2022 inflation forecast +1.4% (previously +1.5%)

  • 1 May 2020, 08:36
    European Central Bank: Euro area GDP could shrink by 5%-12% this year

    • Euro area real GDP could fall by around 5% (mild scenario), 8% (medium scenario), and 12% (severe scenario) this year

    • Under the severe scenario, Q2 quarterly real GDP growth could be -15%, followed by a protracted and incomplete recovery; +6% in Q3, +3% in Q4

    • Under the severe scenario, real GDP is expected to remain well below the level observed at the end of 2019 until the end of 2022

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