Due to the uncertain economic situation, the European moves Central Bank (ECB), the turnaround in interest rates until well into next year. The monetary authorities do not wish to touch the policy rate until at least mid-2020. The reactions in the financial markets are ambivalent.
On the foreign exchange market, the Euro benefited from the interest rate decision. The common currency bounces within a short period of time 1,1290 dollars. Previously, she had still been traded for 1,1229 dollars.
Dax-profits melt away
On the stock markets showed investors disappointed. Some had apparently speculated on an even looser monetary policy of the ECB and perhaps even a reduction in the key interest rates. The Dax lost some of its gains completely and turned into Minus.
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In its foreign Affairs meeting on Thursday in the Lithuanian capital of Vilnius, the Council of the European Central Bank (ECB) decided not to increase key interest rates before mid-2020. In March, the monetary authorities had announced to spin until the end of this year, at the interest rate screw. Even then, the interest was moved to the Outlook time-to-rear. Originally the ECB had not only placed up to the end of this summer with a view to shake their interest. The key phrase to supply the banks with money since March, 2016 at a record low of 0.0 percent.
B5 stock exchange 14.14 PM: the ECB surprised
06.06.2019 15:17 PM
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long-term money injection for struggling banks
Also on the 0.4 per cent penalty interest, the need to pay banks when they Park money at the ECB, shakes the Central Bank. Instead, the ECB wants to help banks with more generous interest rates for new long-term loans under the arms. In the case of the two-year loan, which will be called in the professional world, “TLTRO III”, waves to the banks a bonus if you fulfill the lending demonstrably certain goals.
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long term loans get the banks to an interest rate of ten basis points above the average Prime rate during the term of the loans. In fulfillment of lending targets, he will sink but. He could lie so low, as the average Deposit rate plus ten basis points during the term of the transactions.
“Italian banks are the Main profiteers”
The conditions for the so-called TLTROs, the ECB will be as generous as hoped for, complained of the analysts of the Bank JPMorgan. The money houses would have to pay premiums for the policy rate or Deposit rate.
Nevertheless, the Italian banking index extends its gains after the announcement of the TLTRO conditions and to 1.9 percent. The Index for the banks in the Euro zone is gaining 1.3 percent. Italian money houses the Main profiteers of cheap Central Bank money, are investment strategist Stephane Ekolo from the broker house Tradition said.
Inflation rises less
The monetary policy depends on the development of the Inflation. In the medium term, the ECB aims at an inflation rate of just below 2.0 percent. From this level, the Euro area is currently far. In may, the consumer prices in the Euro area according to preliminary data of the statistics Agency Eurostat, up by 1.2 percent over the previous year’s level. In April, the Inflation of 1.7 percent was still much higher. The latest estimates of the ECB to the development of Inflation and growth will publish the ECB President Mario Draghi on Thursday afternoon.
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strategists a large number of Investment, economic and currency experts had already expected that the ECB will raise the key interest rate for the foreseeable future. Johannes Müller, head of Macro Research, the DWS, predicted recently that a first interest rate increase will step by the ECB will come only after 2021. Frank Engels, head of portfolio management of Union Investment, believes even at no interest rate increases more in the Euro area. Europe Japanese conditions – low interest rates, low Inflation, and low growth threaten.
Further course information, to Gold in euros
staggering of the penalty rate is not for the time being,
The hopes of the financial sector to a reduction in the penal interest rate were fulfilled first of all. Because of the immense cost of the negative interest rates – according to industry figures, last year alone, around 7.5 billion euros in the Euro area – were the last to demands for graduation of the penalty rate or allowance grew louder. Leading Central bankers see this, however, was skeptical.
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1/4 What the Economists to the interest rate decision, say
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