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The minutes of the ECB’s October meeting confirmed the central bank’s alertness on the weakening economic outlook, the impact of the second lockdown and the potential downward revisions of the ECB’s projections. Accordingly, measures of underlying inflation were likely to remain subdued in the context of weak demand and significant slack in labour and product markets. Mr Dombrovskis, Commission Executive Vice-President**, Ms Senkovic, Secretary, Director General Secretariat, Mr Smets, Secretary for monetary policy, Director General Economics, Mr Winkler, Deputy Secretary for monetary policy, Senior Adviser, DG Economics, Mr Bracke, Deputy Director General Communications, Ms Rahmouni-Rousseau, Director General Market Operations, Mr Rostagno, Director General Monetary Policy, Mr Sousa, Deputy Director General Economics. Concerns were also expressed about the possibility of non-linear effects arising from financial amplification channels and about the impact of the pandemic on balance sheet positions of firms, households, banks and governments, particularly given the persistence of the crisis. Currently, it runs from June 2020 for twelve months. The ECB-IBS 2020 Congress will be moved to the 9-12 May 2021 and will still be held at the MECC in Maastricht, The Netherlands. ECB meeting schedule. It has two types of meetings: a monetary policy meeting, held every six weeks, and a non-monetary policy meeting in which it discusses the other responsibilities of the ECB. At the same time, there had also been a reduction in inflation in other items in the price index, which was considered a cause for concern. Ensuring that every citizen can effectively access the life-saving power of 911. Provided that the funds were deployed for productive public spending and accompanied by productivity-enhancing structural reforms, the NGEU programme would contribute to a faster, stronger and more uniform recovery and would thereby enhance resilience and the growth potential of EU Member States’ economies, supporting the effectiveness of monetary policy in the euro area. Financial vulnerabilities in the corporate sector, in particular, could have negative ramifications for banks’ balance sheets and give rise to adverse real-financial feedback loops. Moreover, services inflation was expected to remain low, since the services sector was the most exposed to the ongoing intensification of containment measures. Moreover, by that time, draft national budgetary plans and their assessment by the European Commission should also have become available, together with further indications on the prospective use of NGEU funds. However, the momentum had slowed more recently and downside risks were related to increasing COVID-19 infection rates globally and to geopolitical factors. FRANKFURT—The European Central Bank’s chief economist plans to place private calls to banks and investors after the ECB’s policy meeting next week, he said 2 December, continuing an unusual communications practice that has raised eyebrows among financiers and central-bank officials. Home Financial news ECB July 2020 meeting. The second reason related to expectations of further monetary policy support by the ECB. However, the incoming data pointed to a more severe slowdown in growth momentum and a weakening of underlying inflation dynamics compared with the previously expected recovery path. The euro-area economy is seeing initial signs of strained financing conditions, European Central Bank chief economist Philip Lane said in remarks … Christine Lagarde, President of the European Central Bank, speaks to the media following a meeting of the ECB governing board. In this way fiscal and monetary policy reinforced each other in the current circumstances, with monetary policy increasing its own effectiveness by empowering fiscal policy and fostering confidence. All in all, financial market conditions remained very favourable across market segments, but vulnerabilities remained in the face of the exceptionally high uncertainty surrounding the future evolution of the pandemic-related crisis. There was not a single euro area country that was not benefiting from negative yields, in most cases extending out to the three-year maturity. It was stressed that monetary policy had to aim to preserve favourable financing conditions in the future in order to support economic activity. It is often common for the market to pressure a central bank ahead of important decisions, and this December is no different. Sep. 10, 2020 6:41 AM ET | ... Sep ECB Meeting Scenarios: Dovish Tilt Baseline For Markets But Risk Of Surprise Stimulus. Thomas Lohnes. The main challenge now is how rapidly the vaccine can be mass-produced, and at what cost, to enable sufficient vaccinations to reach herd immunity. Moreover, weaker balance sheets and increased uncertainty about the economic outlook were weighing on business investment. On the other side, renewed lockdown measures in different countries on the back of a surge in new coronavirus (COVID-19) cases, especially in the euro area, were increasingly reflected in asset price valuations. What's priced in: EUR/USD overnight vols for the Sep ECB meeting are the highest since the Mar ECB meetings (Fig. Furthermore, other near-term risk events were looming, including geopolitical risks. Since March, Philip Lane, the chief economist, has spoken directly with a … These new fiscal measures clearly went beyond those assumed in the September staff projections. Author: … The week ahead - EU summit, ECB rate meeting, China trade, Rolls Royce, Ted Baker, Ocado and Airbnb IPO ANALYSIS | 12/4/2020 3:27:22 PM Despite concerns that ECB has run out of gunpowder, President Lagarde affirmed that “the options in our toolbox have not been exhausted. Focus on ECB meeting next week ECB President Christine Lagarde warned last month that despite the progress on Covid-19 vaccines, there could still … These purchases contributed to easing the overall monetary policy stance, thereby helping to offset the downward impact of the pandemic on the projected path of inflation. The resilience in corporate bond markets likely also reflected the fact that firms had built up significant liquidity buffers over the past several months, limiting the extent to which they would have to rely on external credit in the event of a renewed collapse in business activity. Regarding recent developments in inflation expectations, members noted that longer-term inflation expectations reported in the ECB’s SPF were stable at 1.7%, while market-based indicators of inflation expectations had declined slightly, with the five-year forward inflation-linked swap rate five years ahead standing at 1.16%. ECB Meeting Preview. It was also remarked that the rate of infections appeared to be more relevant for economic activity than the stringency of containment measures, which varied considerably. Therefore, contrary to the early phase of the crisis, the joint fiscal and monetary policy responses in the euro area had succeeded in providing firm protection against the risks of fragmentation and of an unwarranted tightening of financial conditions. The outlook for business investment was depressed by weak demand, low revenues and low profitability. Author. The pandemic had triggered a major increase in non-financial corporate debt ratios in relation to gross operating surplus, both in gross terms and net of liquid assets. With markets having stabilised since the introduction of the pandemic-related monetary policy measures in March, it was noted that additional asset purchases might not have the same impact on financial conditions and real economic activity as they had had earlier in the year. 3 - Top LHS) - if we exclude this … The latest data supported the view that the recovery had been losing steam in the euro area. Since March, Philip Lane, the chief economist, has spoken … Market participants had pointed to three main reasons to explain why the spreads had fallen further. While the September baseline scenario had assumed some resurgence of the virus and the need for ongoing containment measures, recent developments were seen as constituting a clear downside risk to the projections. https://www.ecb.europa.eu/press/calendars/mgcgc/html/index.en.html ECB consists of 19 EU member states. The increase in the gross debt ratio reflected both an increase in debt levels and the steep fall in activity, while net debt in absolute terms had declined slightly as firms accumulated large amounts of liquid assets that offset the increase in gross debt. In its communication the Governing Council needed to highlight that the downside risks to the baseline scenario of the September projections had clearly increased, shifting the balance of risks further downwards, and that the Governing Council was carefully evaluating the worsening of the pandemic and the associated intensification of government containment measures with regard to their implications for the near-term outlook. The euro had remained broadly stable against the US dollar (+0.4%), which continued to have a unique role in global trade, and in nominal effective terms (+0.2%) since the September meeting. European Central Bank Meeting Dates in 2019 and 2020 In normal circumstances, the ECB’s Governing Council holds two meetings every month in Frankfurt am Main in … Moreover, account should also be taken of changes in the consumption basket, which implied that inflation might actually be slightly higher than reported. This facility offers Euro area banks subsidised funding in return for increasing lending to the real economy. In this context, members emphasised the role of both national and European fiscal policy in cushioning the impact on the economy of necessary containment measures. It is of significant importance for the Euro area’s economic recovery in 2021 and of particular importance to Euro traders. European inflation remains soft ahead of Dec ECB meeting; another 'key' week for Brexit talks ANALYSIS | 11/30/2020 12:34:21 PM As regards the external environment, members broadly shared the assessment provided by Mr Lane in his introduction. 2020-11-25 16:30:00 Oil Price Outlook: Break of 3Q Range Sends RSI Towards Overbought Zone. The evolution of the pandemic and the responses to contain it will continue to dominate the outlook for both economic growth and inflation, with the countries hit hardest expected to see slower recoveries. Global activity had rebounded swiftly early in the third quarter and more strongly than expected. In September, the ECB estimated a contraction of 8% in euro zone GDP this year, followed by a rebound of 5% in 2021. However, following the trough in April 2020, the euro area economy had rebounded strongly in the third quarter, likely more than had been expected in the September ECB staff projections, making up a large part of the contraction in the first half of the year. Qatar-US trade volume reaches QR11.72bn... Qatar-US trade volume reaches QR11.72bn in first nine months, Virtual Indonesian trade expo invites Qatari investors, QFZA Chairman showcases Qatar’s attractive investment climate in Los Angeles event. The Bank also reaffirmed its emergency … For instance, the service sector PMI in the four largest Euro area economies has drifted lower and now indicates contraction. Regarding wage growth, euro area compensation per employee growth and compensation per hour growth had diverged strongly due to large changes in hours worked. 24 March 2020 Eurozone: Historic … The council’s decisions are always announced via press release at 1.45pm CET on the day of the meeting, followed by an ECB press conference at 2.30pm CET. In its communication, the Governing Council needed to: (a) stress that the incoming information signalled that the euro area economic recovery was losing momentum and that the rise in COVID-19 infections and the associated intensification of containment measures was weighing on economic activity, constituting a clear deterioration in the near-term outlook; (b) emphasise that measures of underlying inflation were declining and that inflation pressures were expected to remain subdued on account of weak demand, lower wage pressures and the past appreciation of the euro; (c) underline that in the current environment of risks clearly tilted to the downside, the Governing Council would carefully assess the incoming information, including the dynamics of the pandemic and developments in the euro exchange rate, and that the new round of Eurosystem staff macroeconomic projections in December would allow a thorough reassessment of the economic outlook and the balance of risks; (d) highlight that on the basis of this updated assessment, the Governing Council would recalibrate its instruments, as appropriate, to ensure that financing conditions remained favourable to support the economic recovery and counteract the negative impact of the pandemic on the projected inflation path, thereby fostering the convergence of inflation towards its aim in a sustained manner, in line with its commitment to symmetry; and (e) emphasise that an ambitious and coordinated fiscal stance remained critical in view of the sharp contraction in the euro area economy and the reduction in private demand. 500 James Robertson Parkway, Davy Crockett Tower, Nashville, Tennessee 37243-0582 | Telephone: (615) 253-2164 | Fax: (615) 401-7642 | Email: tn.ecb@tn.gov Furthermore, members widely agreed that, given the sharper slowdown in growth momentum and the weakening of underlying inflation dynamics compared with what had previously been expected, as well as the deterioration in the balance of risks, it would be warranted to recalibrate the monetary policy instruments in December. 2020 2 for the euro meeting on 9-10 September 2020 - what to watch for the euro area sovereign had! 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