Reuters - The European Central Bank is expected to keep interest rates at a record-low 1.0 percent on Thursday and its head Jean-Claude Trichet will probably caution against high hopes of a speedy economic recovery.
VENICE, Italy (Reuters) - The European Central Bank is expected to keep interest rates at a record-low 1.0 percent on Thursday and its head Jean-Claude Trichet will probably caution against high hopes of a speedy economic recovery.
FRANKFURT (Reuters) - The European Central Bank is expected to keep its main interest rate at a record low 0.5 percent on Thursday but tweaks to its economic forecasts may give investors a steer on the future direction of policy.
The European Central Bank’s vow last week to keep record-low interest rates “at present or lower levels for an extended period” is a big philosophical shift for a bank that used to insist it would not tie its hands.
On the face of it an unprecedented and bold move, such ‘forward guidance’ is really just formal recognition of what markets expected anyway, and the bank’s realistic policy options are narrowly confined.
Oil fell by more than US$2 a barrel on Thursday to its lowest since June 2012, with benchmark Brent dropping under US$92 a barrel, as price cuts from top producer Saudi Arabia added to supply glut worries and weak global economic data.
Oil declined alongside European stocks as the European Central Bank left interest rates unchanged on Thursday, as expected. Investors were waiting to see the extent of an asset purchase plan, which bank chief Mario Draghi is due to discuss at a news conference due at 1230 GMT, which could inject confidence into the euro zone economy.
The Federal Reserve’s gradual exit plan from printing money has shifted the world’s central bank landscape and thrown financial markets into a spin.
The U.S. central bank has pumped $85 billion a month into its economy but has now said it will slow that rate and maybe halt it by mid-2014. The big worry for investors is that there is no playbook for stopping this unprecedented stimulus.