Friday June 7, 2019 - 15:03:23 GMT
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ECB extends Easy Money Policy Until Mid-2020. U.S. Jobs Data Weak.
John M. Bland, MBA, co-founder, Global- View.com
ECB President Draghi Extends Dovish Policy to Mid-2020 In light of the ongoing weakness of the Euroarea economy, It came as no surprise to anyone that the European Central Bank extended its dovish rate guidance further in time at its policy board meeting on June 6 in Vilnius. At this meeting it announced policy actions on official policy guidance and on TLTRO (Targeted Long Term Repo Operations). First it said it now sees interest rates at present levels at least though 1H20. The ECB said this action was necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to 2% (ECB official target over the medium term). This changed their previous posture that rates would be held steady "at least through end of 2019 and for as long as necessary to ensure sustained convergence of inflation towards its target” Second, it was indicated that they will keep investing repayments from maturing securities bought to stimulate the economy. The central bank also announced that the TLTRO interest rate will be set at level that is 10bps above average rate applied in euro system . Up until now, market participants have been unimpressed with the success of the simulative actions of the ECB. Note also that President Draghi is increasingly being viewed as a “lame duck” with his term running out in October.
May U.S. Employment Data Weak The ADP Private Payroll Survey presaged a weak May employment report for the U.S. Payrolls gained only 75,000 in the month and the key Average Hourly Earnings data were lackluster once again, advancing by only 0.20% in the month.. The data supported calls for the Fed to make an” insurance cut” in the Fed funds rate either on June 19 meeting, or at the next one at end of July. An easier Fed should be supportive of equity prices.
GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium
Mon 10 Jun 2019
AA 09:30 UK- Trade/Output/GDP
B 14:00 US- JOLTS Survey
Tue 11 Jun 2019
AA 08:30 UK- Employment
AA 12:30 US- PPI
Wed 12 Jun 2019
AA 13:30 US- CPI
A 16:00 US- EIA Crude
Thu 14 Mar 2019
AA 12: CH- SNB Decision
A 13:30 US- Weekly Jobless
Fri 15 Jun 2019
AA 13:30 US- Retail Sales
A 14:00 US- Flash Univ of Michigan
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