35 Burst results for "ECB"
"ecb" Discussed on Bloomberg Radio New York
"Dot EDU. Influential conversations from Bloomberg television. Here's Tom McKenzie. All right, let's get into some of these other key market drivers then with Alex brazier deputy head. At BlackRock investments institute. Bacillus mentioned the prospects of a debt crisis, maybe different to the one that we saw around 2009, of course, Greece, focal to that. Is a debt crisis can they avoid a debt crisis as the Frank menation tool of which we have some details now, not all the details are going to be enough that you think to avoid that scenario. I think it will be enough. Now, question is, how long does it take to be enough? There may be some volatility along the way. But I would go back to the fact that as we outlined in our report, we think the ECB will pivot at some point away from its determination to raise rates this year towards ultimately living with a bit more inflation and there are two reasons for that. One is, as you say, the fragmentation risk of slamming down demand through raising rates, even if they have a new tool, they will be limited in their ability to raise rates as far as they think they need to. And secondly, the ECB like other central banks faces this brutal tradeoff between bringing inflation right back down to target and stabilizing growth. Once the costs of rate rises, particularly in the environment of the energy shock become clear, we expect the ECB to pause. And as a result, you see that reflected now in the currency. But we expect interest rates at the short end to be somewhat lower than the markets currently. Here more conversations like this one on Bloomberg television, streaming live on Bloomberg dot com and on the Bloomberg mobile app or check your local cable listings.
"ecb" Discussed on Bloomberg Radio New York
"Protect the vital systems we rely on because if we don't, the alternative is unimaginable. Periton. How the ECB wants to make sure that it can actually tighten or normalize the ECB doesn't talk about changing policy. They want to normalize policy, which means they are committed to getting back to a neutral level and not necessarily into restrictive territory. But the question is, how are they going to achieve it? We've seen in bond markets that people are concerned about individual countries, the concern on Italian debt is very much back and that's certainly an extra concern the ECB is working on a anti fragmentation tool. So a tool that will ensure that monetary policy reaches each and every corner of the region, we know very little about what it will look like. President Lake art said it will be ready for consideration at the ECB's meeting at later on in July. But it will involve selective bond purchases. There's some. Rules going to be attached. They will have to make sure it's not neutral on the balance sheet. So they're working on that at the moment and they are starting on Friday. To make more flexible reinvestments under their old pandemic program, just to make sure that we're not seeing spreads blowing out in the periphery and specifically in delay. Yeah, absolutely. That's something we'll continue to watch. Gianna, thank you so much for being with us. Bloomberg's ECB reporter Yana Randall just sort of giving us the view on all of those central bankers gathering in sintra in Portugal. This is Bloomberg
"ecb" Discussed on Bloomberg Radio New York
"The sours top business stories. ECB president Christine Lagarde restated officials intention to hike interest rates in July and September. The comments follow it emergency meeting last week where officials accelerated work on a tall to defend the integrity of the Euro region. Lagarde said the decision to develop this crisis measure is necessary to keep inflation under control. This is certainly the most dramatic action they've taken both the fact of a 75 basis point move. And what was clearly a calling of it audible just before the play at. We're going to adjust a little bit of a technical situation here that was Larry summers. Let's get to Christine Lagarde. Anti fragmentation is a precondition to the proper transmission of monetary policy. And to those who are concerned that possibly, this would be outside the mandate. It is right at the core of the mandate. So this new crisis fighting tool likely to feature purchases of debt from more highly indebted nations than the guard said the work is underway and declined to reveal details on how it's all supposed to function. The measure is meant to be finalized before the ECB governing council's next scheduled policy meeting in July. More economists and industry experts are beginning to say that U.S. home prices will drop as mortgage rates rise. We have more from Bloomberg's Denise Pellegrini. Matthew pointin senior property economist at capital economics says prices could drop 5% between now and this time next year. And point in telling clients rising mortgage rates will limit the pool of buyers and thus force home sellers to lower those asking prices. Bloomberg intelligence says regions with a lot of new homes coming online are among those areas where prices could slip. And at the same time, we could also see demand for some lower priced home stay strong and prices could also remain somewhat elevated in areas where inventory is tight. Denise Pellegrini Bloomberg Debra kaisha. One in four European companies in China are considering shifting their investments out of the country. Those filings are from a survey by the European Union Chamber of Commerce and China, not surprisingly, China's COVID zero strategy was a major factor, the survey was conducted at the end of April when Shanghai was still in shutdown, and when COVID restrictions were in place in the province of jilin. The firms considering a shift in investment in 19% said they were looking elsewhere in Europe, 16% said they were looking at relocating to Southeast Asia, 18% said they were looking elsewhere, and the apec region. 33 passed the hours we crossed two Hong Kong Brian Curtis there, looking at markets. So it's going to be very interesting, I think, to see what happens in the bond market when trading begins at the top of the hour in Tokyo. Yeah, judging by what we're seeing in equities, it probably won't be too volatile, maybe expecting just a little bit of selling in bonds and perhaps the yields will edge a little higher. It doesn't seem that investors are too nervous this morning. We had cash equities in Europe do well and right now the futures are up between about a quarter and three quarters of 1% for essentially all of the markets. It's a sea of green that's looking out at me from my launch pad here on the Bloomberg terminal. We've got the dollar a little weaker so that helps win last traded ten year treasury yield 3.22%, WTI has rebound a little one ten 50 for a barrel and Bitcoin is up now to 20,580. So looking pretty solid here in the Asia Pacific. Paul to you. All right, thanks very much, Brian, 34 minutes past the R and our time for check
"ecb" Discussed on Bloomberg Radio New York
"Treasuries on the longer end of the curve If that fund goes higher than we think you can have some serious inversion I mean you can have inversion that I think people are really not talking about Whether it loses its signal at that point because of idiosyncratic supply and demand forces in terms of telling us what that means for the economy I'm not convinced that that's going to be the case necessarily But keep your eye on that longer end of the curve I'm not sure it's going to follow the fed funds a time There was concern in the news conference about international economies And the stronger dollar That's the question that's the point I was about to make the really big fault lines the fit matters a lot but there are two other immense fault lines in the global economy both of which are affected negatively by a strong dollar One is the Eurozone where very unfortunately the ECB still hasn't managed to convince markets for much the same structural problems that created the crisis of a decade ago that it's going to be able to keep the Eurozone together asset raises rates and more pressure on the Euro makes that all the worse And then in Japan you've had the yin breaking through some very significant one 35 Yes And also 20 to the Chinese yuan which is only the second time it's got there The first time was followed within days by the shocking Chinese yuan's evaluation of 2015 that then caused a sort of mini global crisis for a few months So there is also a very important element of tension where if the Japanese want to keep controlling the yield curve that will mean the United States ever more artificially weak And that is going to be a real problem for its neighbor China So that's the other fault line that it's very difficult to avoid John authors a near case are there Stay.
"ecb" Discussed on Bitcoin Audible
"It's very simple. The entire purpose of the Federal Reserve of the central banks is to manipulate the price of debt. It is controls on the interest rate, price controls on the cost of capital over time. This is price setting. This is a command and control communist like economy. It means that we have essentially socialism in all of these countries within the monetary and financial systems, the base structure of the system is a political monopolistic price setting mechanism. Price controls literally never work. Ever, they never have, they never will. Even the keynesian economic textbooks make it clear that price controls don't work. So the Federal Reserve these central banks literally are doing a job poorly and with massive horrific consequences. A task that the free market literally does perfectly for free at no cost because it is the very nature of the market's existence that allows a price to emerge in the first place. So all of this is downstream from literally just the way the system is designed. And Lin all did even talk about this a little bit in the piece. So outside of the fact that she doesn't really talk about it in the context of price controls, but that in the idea of creating money as a liability and just the nature of our fractional reserve system like we talked about in yesterday's episode is that you can only actually I actually have this quote on a second. Base money is a liability of the Central Bank and it's used as a reserve asset by commercial banks. Broad money is the liability of commercial banks, and it's used as a savings asset by the public. Treasuries are liabilities of the federal government, and they're used as collateral by the Central Bank and commercial banks. In other words, liabilities are collateralized by other liabilities, all the way down. This is why everything is so interconnected. This is why every all our risk exposes us to the risk of the next person in line.
"ecb" Discussed on Bitcoin Audible
"Guys? Welcome back to Bitcoin audible. I am guy swan the guy who has read more about Bitcoin. Than anybody else you know. We have another excellent article today. This one is from Lynn Alden. She's had a couple of really great pieces on her newsletter recently. This is on the shorter side. So it's easy to get into. I've got another one of her longer ones on the way soon. But we're digging into. This is a recent article I think it was from like a day or two ago actually, if I'm not mistaken. There's no date on this. Anyway, it's at most a few days old, but she's one of my go to sources on what's happening in the capital markets, and how to frame the macroeconomic environment. And which is critical to get a perspective on when the markets are absolutely collapsing or skyrocketing, just don't responses, just don't news or rumors on what the ECB interest rates and the fed minutes are going to be like when these central banks are just barely whispering about what they're going to do and it's sending markets and turmoil. You know you've got a fake economy. You know you've got something where you need to understand the macroeconomic situation if you're going to try to protect yourself from this. Of course you can always just buy a lot of Bitcoin and hold your own keys. That's kind of the number one. That's the thing of this show, right? But she always says excellent analysis, and that's why we read a lot of stuff from her on this show. And this one is great on the ECB situation specifically. So the European Central Bank and how it's kind of unique from in comparison to the Federal Reserve or the bank of Japan because none of the individual countries can print their own currency. You know, all central banks are experiencing the storm that's grown from four decades of manipulated interest rates. And as the storm finally hits, they now basically have to decide between two terrible outcomes, either a horrible inflation or horrible recession. That is the dilemma of the central banks today, but why specifically is the ECD in a particularly stuck situation? Well, Lin Alden is here to
European Central Bank to gather after borrowing costs rise
"The European Central Bank's rate setting council will hold an unscheduled meeting to discuss market conditions with borrowing costs for several countries rising after the bank said it would raise interest rates The bank last week announced the hikes in July and September without specifying how it would protect countries sharing the Euro currency if borrowing costs rose excessively as they did in the European debt crisis in 2010 2012 that's a potential concern for heavily indebted governments most notably Italy The ECB's surprise meeting comes the day after that the U.S. Federal Reserve is expected to announce its largest interest rate hike since 1994 Europe's bankers trailed the fed and other central banks in raising rates to combat decays high levels of inflation
"ecb" Discussed on Bloomberg Radio New York
"Is saying it will raise interest rates next month by a quarter of 1% ECD president Christine Lagarde was asked in her press conference if a larger rate rises could be coming in the future When I most investors are assuming this means a 50 basis point rise from the ECB in three months time let's speak to Bloomberg's economy reporter in Frankfurt Janna rando Jana thank you very much for being with us This looks like a big shift in power balance at the ECB A victory for the contingent of officials who are concerned about record inflation Absolutely The inflation forecast has been revised up the ECB now sees price pressures in the media term which is their target above 2% which is very very important And that led to the decision we saw yesterday which means liftoff in July with the 25 basis point hike And if things don't improve then in other 50 basis point hike in September and that is indeed more in line with what the hawks wanted Of course they were out and they would have liked to see that maybe even already in July But that was a compromise this truck was the doves to wait until September And then actually continue going because that was something that was not very clear from earlier guidance What would happen to interest rates after September in the fourth quarter and beyond And that message there was very very clear the ECB is on a path to normalize interest rates and it will not stop after two hikes Yeah okay that is interesting Lagarde pointing to the risks on inflation being to the upside There was no concrete plan though on fragmentation briefly that's pretty vital for Europe It is the bond yields have of course risen particularly in the periphery And people are concerned people are really really concerned that crisis will return to the Eurozone But for now they have stuck to promises to say if what we see in bond markets will concern us if it will be a danger to the transmission of monetary policy than we will act in president Christine Lagarde actually went out and said we can use all tools we can use new tools We are ready to respond if we see something that we don't like Looking at the broader inflation picture ya know what did we learn from what Christine Lagarde said in terms of where they see things going after the short term Yeah so inflation is going to stay very very high The forecast for this year There's never been a better time to find out why bet MGM is the king of sports books download the bet MGM app and place a $10 money line wager on any NBA playoff game If.
Christine Lagarde Signals End of Eurozone's Negative Rates Era
"Think that we've got a problem and it's happening again all over the world. The ECB just came out finally. Christine Lagarde and said, we're going to raise rates. They're following in the footsteps of the Federal Reserve. Of course, they're negative rates right now. So they get a ways to go. They're going to raise by 25 basis points. We've been raising by 50 basis points. The other thing is they're not unwinding their balance sheet. We're looking to unwind our gigantic balance sheet at the fed. And so that's a little bit of a difference and so consequently, I think you're going to still see the Ural of suffering some weakness compared to the dollar, which how is that relevant? Perhaps if you're doing a currency trade and you're buying blue chip, European companies, maybe you're able to get them in a little bit of a discount because the dollar is so much stronger than a historically, at least over the last, however many years has been. Quick story. I got married many years ago in 2001. So quite a few years ago, in Italy, we celebrated our honeymoon over there, and I remember the Euro, which was just coming out right at that time. The Euro was trading at a 15% discount to the dollar. So it was great. Like everything was on sale. You know, you'd look at a price and it was 15% off and those days were short lived. As I look at The Wall Street Journal dollar index, you see that, well today anyway, the dollar is training higher, 95.85. Again, this Wall Street Journal dollar index, but you know what's amazing. You think about the Euro right now and Europe's on sale because you're looking at basically a buck 6. Per Euro. So if you look at the Euro over the last year, it's really been challenged. And even with Christine Lagarde coming out and saying, okay, we're prepared. We're going to raise interest rates. At some point in negative territory, it's not enough to convince the market that Europe is going to get out of its inflation trouble. I
"ecb" Discussed on Bloomberg Radio New York
"Starting to price it a little bit more of a slowdown that will give the fed more flexibility The S&P futures giving a lift up about 5 tenths of a percent getting really close to that 4000 mark Tom You save me there Lisa thank you So much What I was choking on is I read Jeffrey used research report and this is without question the most controversial conversation here in Davos Jeffrey is just brilliant with BNY Mellon And Jeff you you say they're wrong all the people doubting Plaza accord in dollar intervention are wrong You mentioned the giant frankel of Harvard and you say we need to start to think about a Plaza accord of 2023 Why is the dollar too strong Well the tallest too strong in terms of valuations but the U.S. needs to figure this out on its own accord The dollar itself from the fed is not really going to matter in terms of financial conditions You look at the four pillars of financial conditions rates exchange rates spreads equity markets FX by a long way ranks last And also what does Japan need What does Europe need Europe finally the changing their tone You know they need a stronger Euro to bring down inflation but they need to realize this actually strengthens consumer sentiment as well And their purchasing power So this is a very different environment compared to several decades ago We need to think about not a new Plaza or Louvre or anything like that But what each country needs for themselves So that's the difference between now and three decades ago Let's find common ground between David folks Landau over to small German bank and Ian bremmer out with his new book the power crisis and every nation for itself Jeff you how do you have coordination if you're not camped out in the lobby of the Plaza in New York Well you're right now You have enough communication between the central bankers and we've had that over the last 15 years or so like the swap lines and you're doing the crisis and during the pandemic during the pandemic But it's kind of backward looking there's coordination when it comes to firefighting responding to crises and they look at how the sanctions were brought in after the war started but where is the coordination up ahead In an era of de globalization that's the philosophical question we need to ask If you're talking about deglobalization then why bother coordinate isn't de globalization by definition every Central Bank for itself So philosophically where do they stand right now Where do governments stand There needs to be harmonization if not then we can forget about picking up the phone Okay so Jeffrey if we don't get that harmonization and we stay where we are which is in maybe perhaps not a de globalization but regionalization of partnerships how do you see the Euro reacting at a time when people are downgrading some of their growth expectations for world growth And we're starting to see I don't know the Euro get a little bit of a balance from that So I think Eurozone policymakers and to their credit the ECB starting to realize this a strong currency need not be a bad thing You know there are more things to an economy and the trade surplus Let's get away from this 17 18th century mercantilist way of thinking No it's harder for Asia and Euro to dislodge but if you have stronger purchasing power that could actually help offset some of the inflation losses to real income As well So they need to stay a stronger Euro at this point and you're still going to be undervalued like even 5 gigabytes from here right So that is good for the Eurozone households it can lift their demand in real terms That's good for the Euro so they need to actually cross that hill They're not there yet but finally they are starting to shift So I think the Euro will find a new range of higher range but it's still even with a high range right now It's still going to be very very much undervalued We're talking about fluctuations that are minuscule at least for this week but the big elephant in the room at Davos has really been China Jeffree and how we deal with the fact that the slowdown that we're seeing from shutdowns People are not going to end any time soon How do you map that out into a currency call into a growth call at a time when it seems as though that is going to remain the policy at least for the remainder of the year Well what's fascinating is if we look at our eye flow custody data our clients are starting to buy CNY They're starting to buy Chinese equities and after an unbroken run of let's say three or four quarters of selling gentle buying in Chinese government bonds as well So it looks like the global markets they're so underweight China right there They're not actually taking a grow to view I highly doubt that because of the lockdown still happening but maybe they're just starting to find some value on a total return basis with Chinese equities Chinese bonds and also the currency you know where it is But to translate that from a re rating from a growth view I want to go overweight China again The window is narrowing I'm afraid So we need more stimulus more government driven stimulus and demand lift right now But yesterday's Premier League's comments he said basically in a local government you need to fend for yourself in a right now They're very limited resources That's tough Doctor you let's turn to your virology expert expertise which is if China enzyme lockdown what happens to the greater Pacific Rim One day it's going to be over then what Then we are going to have not only in an Asian but probably a global context the mother of all services stimulus is and we're talking about not just lockdowns ending but also borders reopening in China there's no time frame for that but look at how Thailand Indonesia Malaysia the Asian countries dependent are on Chinese tourists Davos you know Tom go to the what shops in Davos you know are they complaining about lack of Chinese tourists and they're buying one of those patek Philippe's right So when they return that $200 billion services deficit China runs with the rest of the world that is going to be such a big stimulus something we can all look forward to but right now again no timeline Do you think Jeff that we're seeing right now people bake in an appropriate slowdown when we take a look at the global economy Or do you think that there's more to come to be priced into risk assets And frankly even to yields So on a qualitative basis I think we need to differentiate what is a slowdown versus so basically soft versus hard landing I think the apostle baking and a soft landing right now but the fed turns restrictive and we still think the market's actually not appreciating the risk of that enough We're talking fed funds rate and you're going to three and a half to four that kind of level then a hard landing that I think the market is probably taking a bit too lightly right now So we're not saying it's over yet by any stretch The markets are appreciating our great slowdown they're just not ready to bake in a harder landing So I think that's where some further repricing is needed then the short term valuations adjustments waiting readjustments We're seeing a bit of a response but I think the fed will have the final word on that Jeff you brilliant extremely important note really pushing against the forget about the Plaza accord consensus Mister U with BNY Mellon today I can't say enough how alone Jeff you was on this call Yeah a lot of people are looking for some sort of coordination in a way that perhaps can stand out Deutsche Bank leading the charge on that But frankly it's hard to see how you get some sort of synchronized move at a time as Jeff was saying Right Where people are moving away from each other and looking at idiosyncratic economies I'm going to tear up my throat just get you know you do this for 8 hours for 5 days and you know I lost it there And Lisa you saved the show Red oak keeper of the yam X is Swiss Yeah He's just tab We staffed Redis and charge like the whole budget here Yeah including the fondue Yeah and the team here I didn't know this I hope I'm pronouncing this I read all I open pronouncing this right Kirsch from schwyz it lucerne we say thank you to phosphine Riji kirsch It's fruity flavor complimented by a subtle bitterness That's great Tom It's great Yeah Thank you for that I'm sure would you say I hope I'm pronouncing this right just for everybody that probably is not right Coming up You keep practicing that We're going to be talking about real estate coming up which I'm very excited about Frankly I know we're just having two different conversations right now but in addition to the jobless claims that we get Last Friday In 20 minutes here we're also.
"ecb" Discussed on Bloomberg Radio New York
"Around the world it has to make it first freely convertible or at least more freely convertible and that just has not happened And it's probably a likely to happen just because Beijing doesn't want to give up the control it has by keeping that capital count closed Well thanks to our China executive editor John Liu Yeah really fascinating isn't it to hear the picture is so very different when it comes to COVID COVID zero policies in China versus Europe Well coming up next on the program So Lizzie and I are going to be welcoming seniors as CIO at saxo bank He's got the quarterly report out for saxo bank Always very interesting His team often look quite big picture So we'll be talking about the two huge events that have worked markets So the pandemic and of course the war in Russia and how this is changing Europe We've also had some commentary out of the ECB more speakers Are we reaching peak inflation or not big question Lizzie Yeah my economy team colleagues Janna rando and Alessandra migula knocking it out of the park Too ECB scoops in the past 12 hours They've got a big interview with vice president of the ECB Luis de green dose talking about where he sees inflation going He says the inflation rate is close to peak And money markets now pricing three ECB quarter point rate hikes in 2022 And again I think we should be asking seniors and whether he thinks that that is possible or not yes we may have 7 and a half percent inflation in Europe and rising but the issue is around the war in Russia and Europe's dependence on Russian energy There are shocks aplenty can the ECB really pull off that kind of policy move And it's not just the ECB who's hastening its eagerness to end ultra loose policy We're also seeing the fed ramping up the hawkishness now calls even for a 75.
"ecb" Discussed on Bloomberg Radio New York
"Own is not a monetary solely problem and they don't have the correct tools or whatever to do and affect things all that they would like to be able to get inflation back down But clearly the threat of recession is much more prevalent in Europe and is elsewhere really So they have to do something but have a confidence that what they're doing is keeping financial conditions easy which is always the preeminent concern that the guard wanted Yana do you think that again as all of these pressures build in Europe we get once more that the concern that the ECB has to make policy for all of these different countries that are being affected in different ways by cost pressures by wages rising by energy prices rising And yet you know all those countries have to be brought on and a lot will be worried as Marcus says what will be worried about a recession hitting their country Yeah I mean the good thing if you can call it a good thing is that the problems are very similar across the Eurozone Inflation is high everywhere It's just a question of how high and in fact the economy is still doing reasonably well in those cases that have traditionally weaker growth I'm thinking of Italy here A lot of support is flowing from fiscal policy from EU recovery funds So in terms of economic fundamentals there is not a whole lot of divergence there So from that perspective fragmentation is not an issue but where there is concern on the ECB of course is what happens when you end asset purchases That's on the agenda for the third quarter unless the situation deteriorates and things change Jana Marcus thank you so much for giving me your time at talking us through what to expect from the ECB decision next week That was Bloomberg's Yana Randall in Frankfurt and our Bloomberg opinion columnist Marcus ashworth I'm Caroline Hepburn here in London You can catch us every weekday morning for Bloomberg daybreak Europe beginning at 6 a.m. in London That's 1 a.m. on Wall Street John Thanks Caroline Just to hit on Bloomberg.
"ecb" Discussed on Bloomberg Radio New York
"Bloomberg daybreak weekend our global look ahead at the top stories for investors in the coming week I'm John Tucker in New York of later in the program A look ahead to South Korea's elections and some inside into Russia but first the European Central Bank is holding a policy meeting next week For more on how Russia's invasion of Ukraine will factor in the policy thinking let's head to London now and bring in Bloomberg daybreak Europe anchor Caroline Hepburn John the boy in Ukraine is sending shockwaves across Europe and beyond the ECB is the first major Central Bank to hold a policy meeting since Russia's invasion was launched giving us the first glimpse of how policymakers appraise the risk and the possible solutions I'm joined now by blooming a pinning columnist at Marcus ashworth and from Frankfurt bar Bloomberg reporter Janna Randall thanks so much for being with me both of you Firstly Marcus what do you think is going to happen at next week's ECB meeting How large will Ukraine loom I think it's going to loom ever present and I think that's effectively put an end to talk of both ending QE and the summer sometime or third quarter certainly and of course any talk of any rate hikes for the next year With Ollie ran the finish Central Bank maybe sort of in the middle but his viewed as how to respect it and once we're talking at least for him to come out and say that they need to wait and think I think that's exactly what the ECB will do which is essentially by time So with TEL throws coming up in June there's interesting whether or not they continue to extend them But certainly as far as QE is concerned I think they'll carry on a similar sort of pace we're seeing this quarter for the foreseeable future and we don't have any talk of ending that probably certainly till in this summer Okay so a pause for thought Yana what implications do you think the war has on European inflation and growth A big implication I would say I mean mark is right in saying the ECB will take its time What they also said though is that normalization remains the right direction for monetary policy And that's of course because inflation which was already forecast to be 3.2% of the year in December is now going to be significantly higher because of because of energy essentially So the bundesbank came out this morning saying in Germany which is Europe's largest economy in station could be 5% this year so that's massive And of course it is very concerned about that So what they will have to signal and then in a way president Lagarde has already done that that they said they will do whatever is necessary to guarantee price stability So while they will take their time to assess the implications growth for undoubtedly the weaker than expected now they will have to send a signal that non motivation at some point when the implications are a bit clearer We'll have to continue Marcus the jump in energy prices both all and natural gas and also other commodities food stuffs included is absolutely stock Is there any way particularly around energy prices that they stabilize or do we continue expect them to continue rising No I knew the answer to that question I'm not sure I'll be speaking to you or they'd be on my yacht somewhere But look no one's got any idea And I think that's why I love the fact that ECB want to keep on with that normalization which is essentially want to keep the promise of delivering something with the practicality of the out there Absolutely sneakers here As we all are there's no way they can know what's going to happen to inflation on the fact that evidently can not control it And there needs to be an expected inflation to peak in Europe and November Now that's clearly going to be probably 6 months late they're going to have to look through this if they are going to keep ever talked about their main prior to our own priorities inflation But they also have a financial stability obligation and that is paramount here and any stay flexible So I think that's exactly what they're going to have to do which is buy time growth is probably going to be hit We probably got a technical session in Germany as we speak anyway And this is an unfortunate stagflation scenario for Europe but there's nothing they can do to control the price of energy and the utterly dependent on imports from Russia and this piece of the various vulnerable situation The dynamics for Europe and the European Union have changed and so must therefore the reaction function for the ECB and that's what will have to happen Well Yana if we're in technically in a recession in Germany surely Russia is about to tumble swiftly into one Is this a financial stability risk then for Europe and certainly for European companies that are exposed to Russia admits this volley of global sanctions against Russia Yeah so the trade links for between Europe and Russia are relatively limited And so are the exposure of the banking sector Of course there is a little bit that we see in Austria Declared some fair bank branches like the failing or likely to fail so that had implications And of course we will see we will see the impact at certain a certain company but overall an aggregate the ECB has maintained that the main channel through which the war will affect your area economy is confidence is inflation on the bank of energy and that that's what they would.
"ecb" Discussed on Bloomberg Radio New York
"The latest comments from ECB president Christine Lagarde and counting down to Thursdays on important U.S. CPI reading Let's head out to Danny Murray EFG private bank deputy CIO and global head of research Dan why did you make that of the announcements that came through from miss Lagarde in the last training day The last 24 hours Yeah I think it's really interesting the way that monetary policy is shifting at the moment Clearly we've seen a really good exercise in house communicate from the third they've gently guided markets towards expectation the rate increases this year and have adjusted inflation data has changed We've seen the Bank of England do the opposite and completely surprise markets with their actions and support their reputation as being an unreliable boyfriend And I think the ECB is sort of children and middle path where they're trying to guide markets carefully and gently according to the data as it comes in but without doing anything to extreme So I think it's a fine line that they're treading so far obviously we've seen markets overreact but we have of course seen a bit of a blowout in the peripheral spreads and in the spread of some of the countries that the ECB has been buying So I think it's very interesting environment in the moment Well one could say is that that faux pas in terms of not decrying a rate height last week is bad communication of blowout and Greeks that blow out in all of the spreads is not exactly guiding us in an even way The question is this is whether inflation is topping 8 or will continue higher And I want to show you on our view as a chart This is inflation swaps which are actually diverging to the estimates by over 1% So the swaps market the forwards market is saying inflation is rolling over on one year 5 year three relative to the estimates The central banks are going to have to dine gray their view on inflation If these swaps are correct do you think we've topped out Do you think the swaps market is right We've reached the top of the inflation narrative So I think clearly central banks have been taken by surprise by the strength and persistence of inflation as have indeed many private sector economists and analysts I think what's really interesting is that the size of the base effect this year is really huge So according to our estimate in the U.S. the base effect will take around about 7 percentage points off of inflation this year But those effects don't really start to kick in until March and that march there won't be released until April So probably still got another couple of months of uncertainty before that data starts to roll over markets always of course overshoot And so it's natural that inflation is going up and it's central banks have adjusted so markets have probably overshot it to the upside and then I think the pricing we're seeing talk to markets I think is really based on those very large base effects that are going to come through later this year I want to get to the treasury sell off that is still underway We've reached 1.95% That is the highest level since the end of 2019 Bloomberg understands that at that kind of level you have the mortgage bond funds that are going to be forced to sell to kind of protect some of the portfolio exposure to further losses What's the trajectory from this point onwards for ten year yields over the next 5 training sessions or so would you say Yeah I mean the short term is always very hard to call but I think the way that we're thinking about it is that the long end always prices in these rape moves for and then it's a shorter that catches up So we expect gentle move higher in the long end somewhere a little bit north of 2% and in the short term we'll eventually come up and we'll see a bit of flattening I think you do of course as you highlighted you get these overshoots impacts where there are certain momentum traders that are either full set of the force bars depending on the direction of the market Of course you get momentum trading that's exaggerated by hedge funds and CTAs and actors can lead to a bit of an overshoot So you may see yields go a little bit higher but as I said don't expect too much further of the sell off in the long end as the markets quickly adjusted to more rate outs from the fed Your view on growth is that global growth will be above trend You're looking for four and a half percent I'm just curious how you position for that Jeff curry says every molecule is scarce in the world a Goldman Sachs the commodity markets are on fire How do you take exposure to that view of growth So I think the context is one where we had this huge amount of emergency stimulus in 2020 both on the monetary side and also the government side But until his natural sort of rebound in private sector activity anyway And so 2021 was a really exceptional year for growth And I think we're not of course going to see that So we're faced with this sort of interesting situation at the moment where growth is still strong but it's slowing down So four and a half percent growth in the world's advanced economy is still of course very rapid by historic standards but it's a slowdown relative to last year I think that creates an interesting dynamic for markets and as they reprise So we still got the tail impact of a large degree of stimulus We know that stimulus is starting to tail off and maybe even going to reverse later this year But at the same time we still got very strong growth So interesting environment I think things to look out for and grow for clearly the extent to which we do indeed see the COVID impact tail off or as we're saying the reaction from different countries around the world is quite varied We have a different impact whether you're in China or Hong Kong or if you're in the parts of Europe it's much less And that clearly has an impact But overall we do expect to wane and we think that the return of the consumer is going to be a really powerful force for the global economy for this year and next as individuals start to get out Get back out there and start to spend some of the savings that they've built up over the past couple of years Daniel thank you very much Daniel and Mary there from each of your private bank deputy CIO and global head of research plenty more ahead On.
"ecb" Discussed on Bloomberg Radio New York
"Vacancies in a show there is a lot of pent up demand and strength going through 2022 There is no excuse at all for the Bank of England to not height rates in the context of where inflation is as you can see in a 7.1% on the retail price index we've got very very strong employment market strongly possibly get So they really know they need to but they're probably kicking into February Okay Will the ECB get shunted despite all of its protestation into tightening also or does Christine Lagarde continue to push back What's the ECB view today They have no choice They have to make a lot of noise and make very exciting that they're doing lots of different things but that's actually doing nothing So I hope they don't give themselves reduced flexibility That's the most important thing here They will clearly from now to the march enactment or the end of the pep program there will be slowing down buying and I have enough chance to see how other markets take that Yes we expect the 80 billion monthly rate to drop to stay around 40 or 50 by the time it comes into March and April possibly a little bit lower but too much lower and of course themselves Problems and more importantly they don't have flexibility to ratchet between the capital key of diverse different buying bonds or buying BTPs or whatever it may be when they need to That would be by far the worst decision Let's hope that they do that Well Marcus you had a nod to this Old enough and long enough in the tooth to remember when BTPs and Spanish yields were bursting out around what 7 8 9% Does the ECB continue to have the ability to keep those yields suppressed as it adjusts to higher inflation It does It has more than enough tools to plan different things And I think regard with vibrant stepping away the guard is in theory should have an easier time It's how she handles it and I think as I said it's all about that flexibility to make sure that they can buy what they need to buy when they do and to give the impression that there is a huge blanket of support across Europe for at least another two or three years And no talk of the rate hikes ironically could be very similar for the European economy Let's not get into that now But I don't think they want to talk about anything like that until next year at the very earliest Okay Great stuff Marcus Thank you so much for being with us Marcus ashworth our Bloomberg opinion columnist giving us the latest details on what to expect from all of these decisions And we have had one just in the last few minutes the nor has bank policy rate will most likely be raised in March to that form Norway a gradual rise in the policy rate incoming years that according to their essentially the moves to tighten the SMB the Swedish of the Swiss I should say Central Bank as expected holding pat of course focus on the strength of the Swiss for that Central Bank Okay the latest in global news.
"ecb" Discussed on Bloomberg Radio New York
"In sell $21 billion in Tesla stock which you'll see also mounting backlash in the UK Boris Johnson faces this emergency debate in parliament today over his attempt to save an MP who broke lobbying rules But we also have lots of news in terms of the markets to bring you including form soft bag and watching the tea live blog this morning SoftBank's second quarter results starting to come in Second quarter vision fund losses total more than ¥825 billion second quarter net loss in all for SoftBank of 397.94 billion yen and first half net sales of 2.98 trillion Yen so that's all coming in from SoftBank this morning Also there's been some discussion on the tele blog and elsewhere about exposure to China for SoftBank and whether that is being reduced and limited by masayoshi son Are being in more details a form SoftBank as we get them throughout the morning Let's go to the markets though first equities at the moment edging lower across Asia MSCI Asia Pacific index down a tenth of 1% I mean not big gains right now U.S. futures also dipping this morning U.S. stocks did churn out yet another weekly game last week and we had much stronger than forecast October payrolls on Friday broad gains in U.S. payroll payrolls in terms of wage growth European equities also climbed for a 5th week in a row so let's have a look at your stocks 50 futures at the moment just barely positive U.S. futures I say down a tenth of 1% The S&P 500 evenly futures But bonds have been acting pretty bizarrely the U.S. two year yield declined closer four basis points on Friday even after that payroll number ten years now trading below one and a half percent bomb bears really struggling Watch out of course today for chief economist Philip lane in terms of the ECB delivering opening remarks at an ECB conference Italian bonds now predicting quite a rocky end to the ECB stimulus volatility on Italy's closely watched ten year bonds really leaped on Friday And just lastly still copper and oil are all up this morning after quantities fell for a third week in a row last week Okay those are the markets This morning but let's bring in Bluebird's cross asset editor Joanna Austin for a bit more detail Good morning Joanna great to have you on the program Firstly on Elon Musk's love of Twitter It will now apparently see him selling quite a good chunk of his Tesla stake Do you think he's really going to do it Jana It sounds like it He said he was prepared for either outcome yes or no And he does tend to when he asks the direct question He tends to follow up on it at some point It will be interesting to see what the impact is because there's a lot of demand for those shares and it also depends what he decides to go into with it if he decides to buy Bitcoin and ether or he decides to go into cash or other stocks So there are a lot of things that could happen with this but it still is a small ish part of the company shares So we'll see if it has a lot of impact The absolutely Do note Musk has changed his Twitter handle to lord edge so a reference to making edgy tweets Okay thank you That's Elon Musk We can also it's an anagram of doge elder by the way People have figured that out too Oh my goodness All the references okay Also took us through investor concerns about China's property firms I mean yes we've been focused a lot on evergreen but also there are other ramifications There seems to be a sell off in terms of higher quality borrowers too That's right So those concerns about evergreen are now shifting to the stronger firms So you have say the debt of country garden holdings China bank is having starting to see cracks as well as the spreads out as investors try to figure out where exactly this is going to land And clearly there's still a lot of concern Lombard RDA was saying last week that there's a risk of a systemic series of defaults in the property sector So one to watch as well Okay to Anna thanks so much For being with me this morning that is a Bloomberg Joanna Austin to their cross asset editor And just another couple of lines that are coming through from soft back that I think are quite interesting So I told you about the second quarter vision von loss remind you that that was 825.1 billion but also SoftBank now no longer listing holdings in Amazon TSMC or PayPal and they still see a full year dividend of ¥44 so that spot on the estimate So some more lines dropping on SoftBank And of course you can track it all and our commentary around it T live go which is our blog that is up right now Okay let's go to some of our other top stories for you this morning And we start with a major step in the return of long haul travel flights for fully vaccinated travelers from Europe to the U.S. begin today But it's been about you and Potts points out the lucrative market will be very different from the one before the pandemic Before COVID closed borders British Airways generated more than a $1 billion of revenue each year linking London's airports with New York's but now with travel set to resume today analysts expect lower demand with flights effectively limited to those.
How Exiting the Pandemic Is Affecting Central Banks
"Joe. I feel like it's an interesting time to be central bank. I mean yeah it always is. But i think particularly interesting right now because the the scope of new challenges new economic conditions new forces on sort of like how banking and money and markets work. Lots of new stuff right now. Lots of a new territory. Yes so not. Only are central banks responding to an exceptionally unusual economic crisis in the form of a global pandemic which basically led to the shutdown of the entire economy last year. But they're not now Reacting sort of differently to the recovery. So for instance. We saw the fed coming in more hawkish than expected last week. But it's still on hold for the foreseeable future. You have brazil delivering successive rate hikes to deal with inflation. China's sort of winding down. Some of its easy monetary policies. The ecb hasn't even started tapering or even talking about tapering at this moment. In time so you have all these central banks sort of off and doing their own thing trying to respond to this very new environment. And in the meantime you also have some very interesting ideas floating around on the nature of money so sort of like the very fundamentals of being a central
ECB to Speed Up Bond Purchases
"Eyes are on the european central bank this morning as worries over rising bond yields remain a concern for investors no changes to rates or the amount of bond purchases are anticipated. Though policymakers will decide whether rising borrowing costs or a threat to the panic stricken economy. While the ec- be has current quota to purchase one hundred trillion euros through next march purchase volumes have decreased over the past two
Europe gets new blast of stimulus to counter virus surge
"The European central bank is on the east another six hundred billion dollars as a stimulus to counteract the negative effects of crime virus some pre Christmas sales went to such an infection shut down large parts of the European economy ahead of the region's most important holiday ECB president Christine Lagarde said something was needed to help certain sectors of the economy in the manufacturing sector continues to hold up well services activity is being severely curbed by the increase in infection rates the new restrictions on social interaction and mobile the twenty five member governing council decided to increase its bond purchase stimulus to two point two trillion dollars the bond purchases help keep credits affordable and available across the economy for consumers businesses and governments I'm Karen Thomas
ECB hints at more stimulus in December as new coronavirus lockdowns are imposed
"A second wave of coronavirus infection sweeps across Europe, the European Central Bank said a strong signal that it could increase its monetary stimulus in December to try to cushion the economic shock from a new series of lockdowns. Analysts fear lockdowns in France and Germany could push the region's two biggest economies into contraction and the fourth quarter.
ECB addresses stronger euro, says it will ‘carefully monitor’ exchange rate
"Currency traders are preparing for a key meeting at the which has seen the euro appreciate heavily over the past few months especially after the Fed signaled a willingness to allow inflation to overshoot its target. The dovish stance which gives more weight to the labor market and less weight to inflation has added to the downward pressure on the US dollar and the E CB's Christine Lagarde is expected to talk down the euro as much as she can normally a central bank would cut interest rates to deal with this kind of situation but rates are already deeply negative across the eurozone instead the May stress that the one point thirty, five, trillion, euro envelope of the P P P pandemic emergency purchase program is not a ceiling and that it is prepared to increase its pace and size.
The ECBs Former Vice-President Explains The Historic Step That Europe Just Took
"True CEOS thinking we don't really talk that much about Europe these days. I mean, I guess not in relation to the the heady days of the eurozone debt crisis. Now we don't, but also I feel like this particular crisis at least some of our episodes, you know, obviously, we talk a lot in the bed context the US context, of course, know talked about Hong Kong and Asia and Asia supply chains in China and so forth stills like we've focused a little bit less on how this current crisis is playing out in the Europe. Yeah I think that's right I. Guess the implication is that maybe this has been unfair in some respects because there has actually been something very interesting going on in Europe at the moment. Yeah. I mean, for one thing you know there's a good argument to be made Europe at least relative to the US, if not necessarily Asian countries has done a pretty decent job overall of suppressing the virus self and you know for years during the euro area crisis, they're always people fiscal policy. Fiscal Policy Missing. You gotta spend more gotTa get the Germans to spend more and you know maybe this time it looks like they're actually doing. Yeah that's exactly what I was thinking. So we have the announcement of a big deal seven, hundred, fifty, billion euros worth by the EU to fund on long term recovery. Fund for the Eurozone and that's a big deal because as you point out, everyone's been talking about fiscal stimulus but it looks like the euro-zone is finally going ahead and doing it. Right and so this of course raises questions and it's a theme that we've definitely had a lot on on our podcast, which is, is this offer something bigger for the post-crisis period? So sports, it's well known that know there's a lot of money being spent by governments all around the world including the US. But the question mark is okay when the crisis phase is over the government's just retrench or does this become a sort of new macroeconomic stabilization model? That's a theme that we've had dozens of times but it's particularly important to New York, in context I think because people have sort of identified the lack of fiscal burden sharing his sort of a basic architectural tension or flaw within. Euros. Yeah I think that's exactly right. How does the I don't want to say the intrusion of fiscal stimulus but how does the arrival of fiscal stimulus on the scene actually reshape the way that monetary policy works and I? Guess we should also mention that the is also in the midst of a of another really important project which is rethinking. How it targets inflation. So we have all of this going on simultaneously real existential questions for the role of the European Central Bank. Absolutely well, I'm very excited. We have a fantastic guest to talk about all of this we are going to be talking with Vito comes don. So he is the former vice president of the European Central Bank from two thousand, Ten may twenty eighteen. He's now a professor at Navarra University in Madrid out the perfect guest to discuss all this. So without further ado, let's bring him in a veto. Thank you very much for joining us. So are you happy to not being a policymaker in this time or you? Do Miss being at the ECB during such an extraordinary moment. Well, it's always difficult to get out of you know executive responsibilities and I. Of course, I would not say that I, am Epi at the out or unfortunate circumstances of the covy. The shock we are again in a very important periods of policy making but. Me Europe as been doing well I think in these episodes. Better than in the previous episode of two, thousand. Ten to two thousand twelve. Just to start out with walking the significance of the deal that was agreed, this seven, hundred, hundred, billion euros you tweeted about it clearly, you think it's important. What's the significance. Well it establishes for president that are very meaningful. In, the first place it involves a decision to issue common European depth. The Commission will issue seven hundred and fifty billion of debt to fund these program, and that's the first. The second the point is that these is going to be distributed in the form of budget transfers and not loans to the country's. Third IT'S A big program to implement Wat- is a European fiscal policy stimulus to address a recessionary phase. India to be an economy, and that's also the first time that these happens at this level and fourth the distribution of the ballot transfers which. Correspond to a little more than half of the seven hundred and fifty billion is done in a way that it is not proportional to the size of each country. By two indeed benefits more the countries that's have lower level of leaving and higher unemployment. So there is a convergence play. There is solidarity aspect of these edits also quite new in terms of transfers to give you two examples on a proportional basis, Italy would be entitled to fifty billion, but the they are getting eighty billion. Right as Germany, you'll be entitled to ninety six billion in proportional terms, but is getting only twenty seven. So these four points put together constitute the indeed very important precedents and babs, and do we all hope so that it will be a sign of things to happen. If again, there will be a stressful situation in the European economy, and that's a very important element for everyone the notion that when there is a very stressful social economic situation Europe, steps up and two x decisions to fight the recession and does not leave behind any of the member countries. It's a big message for the future and I think markets are really beginning to injury injuries what these means And we see that already but it will take time of course, perhaps for the markets by Geico anglo-saxon markets to overcome. Lingering, doubts about the European project.
"ecb" Discussed on Bloomberg Radio New York
"Flexible manner over time over asset classes and among jurisdictions this allows us to effectively stave off risks to the smooth transmission of monetary policy second we decided to extend the ricin for net purchases under the pep to at least the end of June twenty twenty one in any case we will conduct net asset purchases under the pope until the governing council judges that the coronavirus crisis is phase is over third the governing council decided to reinvest the maturing principal payments from securities purchased under the pipe until at least the end of twenty twenty two in any case the few to roll off of the paper portfolio would be managed to avoid interference with the appropriate monetary policy stance fourth net purchases and our asset purchase program will continue at a monthly pace of twenty billion euros together with the purchases under the additional a hundred and twenty billion temporary envelope until the end of this year we continue to expect monthly net asset purchases under the asset purchase program to run for as long as necessary to reinforce the commodity of impact of all policy rates and to N. forty before we stopped raising the key ECB interest rates fifth we intend to continue reinvesting in full the principal payments from maturing securities purchased under the APP for an extended period of time post the date when we start raising the key ECB interest rates and in any case for as long as necessary to maintain a favorable liquidity conditions and then full degree of monetary accommodations six we decided to keep the key ECB interest rates and changed we expect them to remain at their present all lower levels until we have seen the inflation outlook robustly converge to levels sufficiently close to but below two percent within a projection of ricin and such convergence has been consistently reflected in underlying inflation dynamics.
ECB set to expand bond-buying to soak up debt
"Let's get an update now on some of the day's business stories with you in pots from Bloomberg you and welcome back to monocle twenty four the European Central. Bank is expected to take more action tomorrow, and they'll be new coronavirus virus measures from Christine Lagarde. And hopes of a swift recovery will be downplayed. Yes, of course, the issue be one of the world's central banks, which took very rapid action back in March to counter some of the terrible economic effects. We're seeing from the current arsenal around from the measures taken to counter the current of ours. They announced the pandemic emergency purchase, program or pet. Back in March which involved seven hundred and fifty billion euros of the bond buying? The idea that the central bank step into by that and keeping rates low, the government's the companies and also for Boris with mortgages, etc, that going until at least June twenty twenty one but the expectation. In the market is, the will be more announced tomorrow. Columnists seem pretty certain. ATP will wait in with more stimulus smart at its current pace, it could wait until it's July or September meeting before judging the programs big enough to soak up over debt, being issued by governments defy the recession, and of course there is a lot of depth baby shoot. At the moment since last meeting, we've heard from the European Union moving closer towards a Common Fiscal Response the commission saying he wanted to spend seven hundred fifty billion euros with its Recovery Fund, but as to the tomorrow reckon we'll get at least another two hundred fifty billion dollars of stimulus taking the program to at least not one trillion euros at so tell us a little bit more about economic picture around Europe given the fact that this huge amount of stimulus is needed unlikely. Yes I told him this morning. We're going to get the pay date. So the coaching index is the most timely economic survey we have. We get the figures the May This morning. I'm about nine o'clock, and we're expecting that number to jump to thirty point five. Not just explain what that means. Fifty is the guy is the between expansion and contraction iron, fifty expansion, obviously no economies and you're spending at a moment in April that was thirteen point six. The lowest reading with ever seen toback think in May will jump to about thirty, so that's a lot better than April's reading but he's still pretty terrible. It's actually puts us back in line. Awfully what we saw in March when economies shrank pretty badly around European Union still. About the shape of the recovery. In the beginning or passing my have a v-shaped recovery with the economy bouncing back very quickly. Not many people think that any more more likely will get You even less missing. l-shaped recovery or Nike swoosh or some other recovery which is uncertain and quite wobbly over the rest. Of this year, but it's a little bit of optimism. Coming back into commerce forecasts in the past couple of weeks, I'm certainly markets. Very Optimistic Sense Gotcha will be enough to rescue. The flailing economies around the world
German court asks ECB to justify key stimulus program
"Europe the ECB is being defiant in the face of a German court ruling which questioned its bond buying program the ECB's pledging to continue doing everything necessary to revive inflation in a statement to the ECB also noted that Europe's top court had previously said that its QB program was legal the German court is giving the central bank three months to prove its asset purchase programme does comply with the law meanwhile the C. B. isn't the only monetary authority being challenged on the legality of its crisis measures in Sweden the Riksbank is defending its right to buy corporate bonds the big banks general counsel says that it is home for Sweden's parliament to claim that the bank doesn't have the legal right to purchase debt issued by
ECB President's horror eurozone prediction: EU risk crisis not seen in UK for a century
"The head of the European central bank has warned that the corona virus pandemic has cools the eurozone economy to shrink to rates never seen before Christine Lagarde told reporters it could contract by as much as twelve percent this year we are facing an economic contraction of the magnitude and speed that is unprecedented in recent history in our area entire sectors of the economy to a large extent was simply shut down and it will continue to be reflected the hard numbers are just beginning to calm preliminary figures have already shown he you economic growth falling at a rate of more than three percent in the first quarter of twenty twenty when lockdown measures that only recently begun
ECB to Judge If Trillion-Euro Stimulus Is Enough
"Despite today's data showing the damage corona virus has done to the euro-zone economy in the first quarter European shares. Are Little changed now. The focus turns to the European Central Bank. It's so far pledged more than one trillion dollars in support but chief Christine Lagarde has said there are no limits to the tools the e C could use to fight the crisis. I N G is Karston. Bresca explains when more measures could be deployed. I think they'll have to announce something soon not necessarily today. 'cause we now have two six extremely exciting week since the last meeting with lots of announcements new. Q. E. The pandemic emergency program and I think right now is the moment to take stock and then wait until the June meeting will also bring the latest around a forecast and to that point second quarter data could arguably be worse than the first quarter data. We're seeing today. The has been crystal clear that government support through fiscal spending measures needs to be bolstered. Ten governments do more. Governments can definitely do more. Interest rates are extremely low. There is lots of loans being made available for for governments. They are territories in the north. East we can still do something. Warmness is to to calm. Financial markets and the other one is to provide ample liquidity into the banking sector. That banks are able and willing to provide them nose to the read economy. Well no the latest. Ecb policy decision at seven forty. Five eastern time I N G chief economist Karston Brodsky. Thanks so much for your time. You're welcome well. As officials work to combat the economic impact of covert nineteen hopes arising here in the UK for Corona virus vaccine to prevent more people from getting sick pharmaceutical giant. Astrazeneca has signed a deal with Oxford University to produce and distribute a drug as the BBC's Stephen Ryan reports. The vaccine is still in the early development and testing stages and there's no guarantee but the UK's Health Secretary Matt. Hancock said today the new agreement between Oxford and AstraZeneca gives the UK the best chance of a breakthrough to defeat this corona virus. Several hundred people have so far taking part in clinical trials at Oxford University. But Sir John Bell a professor of Medicine says scaling up so enough doses can be manufactured. Has Its challenges the vials that you put the vaccine in. There's only two hundred million dollars left in the world now because they've all been sucked up by various people who can anticipate a vaccine coming along so so there's lots of challenges in getting this to work
"ecb" Discussed on Bloomberg Radio New York
"I guess my question for you is is this massive bond buying program that the ECB announced what markets were looking for well it's certainly part of what markets are looking for but I don't think markets fully know what they are looking for I think they want to see that the central banks have a willingness to give them unlimited tools and that of course means that central banks need to be exploring and considering even more experimental non a Terry policy tools so yes bond buying is very very important but I think markets would release respond positively to the notion that central banks may be considering things like helicopter money that really can impact individual households in the midst of a crisis would not be something that would come on the fiscal side I'm actually Hey it could come either way it could come from central banks keep in mind that that is the idea behind a helicopter money is quite amorphous it was just an idea that was thrown out a few decades ago so it's really not that dissimilar to QB I keep in mind large scale asset purchases which is an academic theory back in the nineteen sixties utilized by one central bank in the early two thousands in a very small way and of course and then became the the weapon does your during the global financial crisis so it's funny how things can evolve and especially that which doesn't have a lot of structure or rules around it can be interpreted in different ways I think this is the time to be exploring extraordinary monetary policy tools are you seeing any hints given the extraordinary moves we've already seen from central banks that they might be thinking that way are is are there potential risks to such an extraordinary mo well there are risks to any kind of experimental monetary policy let's take a negative interest rates certainly when central banks said began utilizing negative interest rates as a tool they didn't know what the unintended consequences would be you only find that out as you use it but at the same time you will still find out the efficacy of a tool unless you use it and course we learned that Q. E. was effective at least in terms of impacting asset prices in terms of negative rates of course Europe in particular is found itself in a trap of negative interest rates that it's had trouble getting out of even before this current crisis took place is that kind of what could be potentially holding central banks back from considering something like helicopter money or something even more extraordinary oh absolutely and of course the bankers tend to be traditionalists however I do hold out hope for the ECB given that Christine Lagarde is a nontraditional leader of the central bank thank I do believe that desperate times call for at least considering desperate measures what's interesting about helicopter money is if it came from a central bank it would likely be in response to the fact that governments haven't provided enough fiscal stimulus I think that's the crux of the lot of the lack of confidence in markets hi is this ex expectation at least in the U. S. that the government will not provide enough fiscal stimulus I think that's a common problem certainly we've heard dental Max bankers bemoan that for years course the a number that's being bandied about now in the U. S. is another one point three trillion dollar stimulus measure you thinking that's not enough for this idea that perhaps the U. S. could take equity positions in companies again that that might not be enough either well certainly a combination of things might be enough but each of those measures on their own would fall short in terms of I think what markets are looking for they don't want one does is that they want multiple doses as your last minute here China reported no new infections at least today does that give you a sense of where recovery on this side of the world could come oh absolutely what I have been saying since this crisis has begun is that this is not like the global financial crisis in that we don't have a play book to get out we actually do have a playbook it's a three pronged approach it's providing the appropriate health policy in other words a really stringent measures to control the contagion I'm number two adequate fiscal stimulus in number three adequate monetary stimulus and that's a playbook of that we've seen in China there on the other side of this and that gives me a lot of hope that if the US does things right it can be sooner rather than later let's hope so in D. Kristina Hooper chief global market strategist at invesco thanks again for being with us this morning on Bloomberg daybreak morning in which we may be looking for some direction after all the central bank moves right now S. and P. futures a lower by ten points Dow futures down.
Europe's central bank launches new program to calm markets
"That will the ECB late on Wednesday night and I'll say seven hundred and fifty billion euro bond buying program for both public and private sector securities including Greek government debt this as a straight is all be a cut interest rates this morning and stimulus from governments around the world is now reach one point nine trillion dollars and counting well joining us now is the best cross asset team added such a wonderful singer who's been following the markets for us radius we've been on this wild and unpredictable fight on the C. B. frauds what do you markets make of it that it seems have reacted that's positively what's included in the program well the main issue is that markets are just really looking for more there is one person who said basically nothing would be enough this week and that's a little bit fatalistic by it you know it we have now one point nine trillion we had somebody earlier saying they wanted to see more than twenty trillion total in terms of stimulus so the ECB is coming out and doing its thing the the reserve bank of Australia did some new measures this study even started a money market mutual fund liquidity vehicle but it's it's still just not enough enough and there's still so much uncertainty which at the broader picture here of we still need to be looking at the virus cases how the containment goes how the economy is fair schedule now you mention it was about the OB I will start the expecting into the use of the Philippine central bank action really stepping up but this is the the the the indeed what everything actually make any difference really well that's the thing that's the tricky right even with these cuts some people are actually saying that if you cut too much then you get to a point where liquidity is actually stretched even thinner depending on the mechanics of it and people are really looking for the physical side of things that the physical fight is also tricky because that house they go through the process and you know you also have the issue of if you're getting a margin call now even if there's a headline saying ECB is going to do this that's not helping you as you need to make your margin call right so there is there is still a lot of things that have to go through the system and that's not necessarily able to reassure markets that much right at the moment yeah I suppose my question is does that change in maybe a week or two weeks time when things become more apparent with the code of ours output and the knows that there's a massive contrast between actually what China is doing the PPO see far fewer cuts than the fed did not score a lot of people's attention just briefly right yeah that's interesting and to answer your first point yes of course as we go along as we get more information as we see how this plays out hopefully in the next week or two we will start to get clarity will start to see your cases in your cases in the U. S. but it also depends on the type of reports we get if we are seeing more clusters are foreseen containment but yeah then from there I mean it's there's just so much still to and to be dealt with and how the economy is will come back and that there are a lot of question
European Central Bank says it will buy 750 billion euros in securities this year to counter effects of virus outbreak
"Meanwhile the European central bank has launched an emergency bond buying programme worth seven hundred fifty billion year is at present Christine Lagarde says quite extraordinary times require extraordinary action adding there are no limits to the ECB's commitment to the euro the central bank is also considering basing itself impose security
"ecb" Discussed on Bloomberg Radio New York
"The fed delivering emergency right calf as the ECB president once about six thousand a night about crisis and last year attacks from the Bloomberg interactive broadcast studio hello Wednesday here is your Wednesday morning price action equity futures down and down hard up by two percentage points on the S. and P. five hundred in the bond market a bid for treasuries yields come in ten basis points to zero point seven percent and in foreign exchange cable gaps the lower and then recovered all the losses and some against the dollar the pound is now one twenty nine twenty five just extraordinary John is no other way to put it folks we're listening verbatim the governor Carney and governor designate Bailey go added in in John I was thunderstruck records John Ferrell focuses a lot of experience of following bank of England in the C. B. that was a conversation of an institution back to sixteen ninety four with independence from nineteen ninety seven that conversation I would suggest could happen at the fed and certainly can happen tomorrow the ECB and I think you make a really good point I was in the room at the bank of England shortly after the brexit vote I don't remember the bank of England governor county specifically bring the full weight of the institution into a moment like the migraine right now and I thought everything he had to say was the exact precise thing he needed to say in this moment this could be a temporary shock how temperate will pay depends on how they act today and officials must help to build that bridge from where we are now to where we need to get to certainly his finest finest moment I thought I know you thought around brexit was good I'm not going to read the whole statement but this is prudence with a purpose its resilience with the reason and I heard the word resilience like eighteen times how resilient compatible guard be tomorrow she's got a really really difficult task in front of a Tomar she says she can't do the kinds of things the sea bass would like to do that the bank of England has done because the bank of England today is going to work with the treasury that's what is so unique about this moment in the U. K. they're able to do an emergency right caught a lending program cut the counter cyclical capital buffer as well and Lee said do it on the day that the punch in the U. K. is being released and that's the critical coordination the U. K. can engineer the Europe is going to really struggle to writing Christine Lagarde is trying to use rhetoric instead to get European leaders to actually get together saying we're going to see another two thousand and eight style crisis if you guys don't get on the ball and create some programs I do want to talk to point John I know we were discussing this before the show what the reaction in markets really is saying to me it seems like there was a sigh of relief in a British assets in risk assets there is a sense that this was an optimistic this is a positive not what we saw in the U. S. after the fed's emergency rate cut and I'm wondering whether this is sort of an endorsement or if this is just me reading too much into it is a market reaction but still seems to be exactly the prescription that you were taught calling for as well we have lines on the Germany folks in China translate these four they go back to the build headlines of yesterday with Merkel was some really inflammatory comments on who could be infected from the virus but John more recent headlines Germany won't black E. U. crisis spending plan genital two whatever is necessary to fight the crisis according to chancellor Merkel the headline just crossing the terminal right now I hope that's the case Tom because Europe right now behind the curve in the same way the United States is take this is Christine Lagarde BCB president two weeks ago Feb twenty seventh in the Financial Times not at this stage but would have a lasting impact on inflation and require a multi policy response March ninth reportedly timing he usually does without coordinated action Europe will see a scenario that will remind many of us of the two thousand and I cry so then you're bringing over the United States were you know for Lisa you're so good at this what is the gaming right now fed rate cuts to come if they have to work in a in a in almost a vacuum of only that single monetary policy tool this is so the body language folks yesterday or was it the day before between the president and even Senate Republicans you know it it's a photo shoot before she's right now I work in our day president trump did show up to the press conference that everyone was expecting him to deliver some details yesterday which is part of the reason why we signed marriage turn in the market but looking just right outside funds futures were seeing basically zero rates come in the next two meetings right come by the by April I mean well one thing that I want to point to the German inflation expectations are actually picking up just a touch on the longer term on the heels of some of the rhetoric out of officials in the United States the inflation expectation for the next five to ten years has fallen to the lowest since nineteen ninety nine one point one eight percent long term inflation people do not have faith that we are going to get the policies it can actually generate growth over a longer term and those expectations have fallen off a cliff to try and talk a little more about that a little bit later let's turn now to the U. K. with Rupert Harrison blackrock multi asset strategies portfolio manager for me at the treasury as well working alongside the former chancellor George Osborne fantastic to have you with us on the program this morning especially on a morning like this morning replace talk about the response from the bank of England what may still come from treasury little bit Lysa three to harass them with us yes yeah hi sorry sorry I I I I agree very strongly with what you will been saying in the sense that I think this is a real demonstration of strength from the U. K. system to get shows us with maturity from the bank of England which is an institution that is I think comfortable in its independence calm confident of its independence I'm baffled willing to be seen to act in a coordinated way with the treasury we saw some similar things in the policy the funding from the needs of the scheme set up in two thousand twelve but I think it is a big advantage of having strong credible institutions I think as you say it would be very difficult for the fed to do something similar indeed we sold the fed deliberately separate it but since the fifty basis point cut from the G. seven finance ministers Cole I think largely due to wanting to avoid the perception of impositions on the independent so yes I do think that the UK institutions demonstrating how you can boost confidence by coordination reckless talk about how important it is to help SMEs in a moment like the moment we're in right now it seems to be a big focus of the bank of England how do we get that focus to go beyond the U. K. into places like Europe into places like the United States well I think that the the policy community directed I think that we will see further action in the budget in the UK today that these these have funding schemes for banks with incentives to lend to SMEs this is the similar to the kind of things we did in the UK in two thousand twelve the from the commanding there okay frankly the banks can gain the targets and this is not the way the guaranteed you're going to get cash to us I mean you have to see the finance ministry acting really to get cash to this amazing trouble on top of the bicycle by collections I think you will see that in Europe I think it will be a you know a combination of European white and Frank you just have to do is going to have to wait and see national level options and I hope that we will see it in the U. S. but of course it's going to be a much more difficult mechanism to get agreement around the right even though the people the policy community I think now fully understand with us will need to ask the same question as server Stephanie Flanders earlier today to the reason we get that this action today was it because of prime minister Johnson was it was because we have essentially a pro brexit vote was it because we have a new independence or free thinking in the United Kingdom less attached to the European continent no I don't think so I think this is because of this of historic means of working in the UK institutions I think the treasury the bank thing and have for a long time worked well together and I think that there is an understanding in the treasury and the bank the this is a time for this you know this is not a time for holding back so I think you will see children receive back in the budget later today you know they said nothing you know doing too much I think you will very much not want to be seen as come under delivering I think it will be over to live a belt and braces unit resilience insurance against what might become a good thing about your particular to this government I think it speaks more to us so historic strength of U. K. situations but of course it's very welcome to see the U. K. I think performing kind of well internationally compared to other countries going to your core which is investing how does is give you conviction when it comes to putting on a trade in other words are you going to invest more in U. K. assets as a result of what the policy makers did it's certainly out the margin makes us feel more comfortable that the U. K. is going to do everything possible to avoid permanent economic damage from this disruption but frankly you know I I think we've seen the market action over the last few days but while policy actions are welcome you know people of a market very very aware that policy makers are all second amendment to the sort of fundamentals of the spread of the virus and you know innocent market to pay more attention to the to the negatives are you when and how and why throw it all restrictions on activity going to be I think that it it it's about putting companies in place so that if we do get to a situation where people can see beyond the peak of ours that's when people will take confidence from policy measures being in place to prevent permanent damage docks where will help see the kind of more rocket bounce back thank you so much of blackrock this morning joining us after an historic moment for the bank of England regularly agent for just publishing a scathing note a sense of panic as a golfing at Washington he goes on the notice to Congress will leave town at the end of this week without agreeing on a physical response to the crisis boys at such a different tone of what you're just talking to doctor herself yeah I don't know if I did on my own interpretation without a correct idea respective respectfully I don't see any sense of urgency never mind a sense of panic do you see a sense of urgency in Washington president of course I don't see it from the administration of the moment I thought I could Larry Kudlow this past Friday I want to ask about payroll tax cuts yeah he said there are pros and cons I lean against it okay the V. policy right right now Navarro's for payroll tax cuts in the notion in Kudlow are aggressively against them along with many members are kind that's exactly I was gonna say whether they could actually get it passes another question a lot of conflicting reports not getting a lot of conviction to the tape and that's really going to be the question what will it take to regain the confidence of people that they actually do have their finger on the pulse that there is a sense of urgency take case story for the next couple of hours right here on Bloomberg surveillance fantastic line up of gas for you as well as we can't get down twenty C. B. right decision that comes up tomorrow for another let's get some headlines.
Snapshot of the Global Stock Market
"Thirty minutes in the equity market open here in Europe we started quite firmly in the green wood coming off the high so a little bit for European equities up a tenth of a cent on the stoxx six hundred looking across regional equity benchmarks some of these now turning into the red footsie one hundred down six tenths of a percent the CAC forty index unchanged the ibex lower by five tenths of percent the footsie maybe the red by four tenths of a percent European equities following the pattern of what the U. S. is doing yesterday we saw a rally a four percent on the S. and P. five hundred the market reacting much will positively to the Congress spending bill to the tune of almost eight billion dollars than it did to fed rate cuts it suggests that equity markets perhaps like the idea of physical or combination of best sets on monetary policy but U. S. futures in the red now more firmly in the retina yet Dow S. and P. and nasdaq futures all dialed up by more than one percent we saw green on the screen in Asia that might have been a bit of a catch up to the Asian session the ten year treasury yields down four basis points one of one handle on vast and looking across the curve you seen yields full across the treasury curve five a two year yields down five basis points to sixty five handle thirty a yield of one sixty five down five basis points to two stents code has been steepening for nine days though that's about that some more rate cuts from the fed and speaking all bets around rate cuts will the market is pricing for the ECB and the bank of England to cut an emergency cut from the bank of England the ten year gilt yields hit a record low yesterday was up a basis point and a half now on a thirty eight handle the ten year bond yield up a basis point to negative sixty three some say woody not long until we get to a fresh record low on that ten year bond yield taking a look across affects the yen is the best performing currency out of G. ten so that is big safe haven bid the power went up two tenths of percent of under performance in CAD we did get that rate cut from the bank of Canada she looking at commodities oil coming off the high from the Asian session but still slightly in the green WTI forty six ninety E. six Brent at fifty one thirty nine and gold up a quarter of a percentage point one thousand six hundred and forty one dollars
How Will Virus Risks Affect Central Banks?
"Meanwhile let's also talk about central banks and actually what's priced in this year for the fed to be a week and the ECB unit in the context of coronavirus the dust is settling a little bit off to the big moves yesterday so what are we talking about when it comes to central banks well when I say Caroline is a price action in the rates markets in recent weeks have been have been driven by a huge flight to safety and yesterday saw what I would call a material intensification of that move so I guess here's where we stand in terms of central back pricing that is fed easing expectations have risen sharply fed funds futures now price to fully price to twenty five basis point cuts this year and traders actually starting to price a third in some there's just under sixty basis points of cumulative using price by the end of the year with the timing of the first cut now expected in June and then for the C. B. zero S. market now prices in about eight basis points even by year end so it's not quite a full ten basis points rate cut priced but the probability has inched higher and did and did get a little bit of momentum yesterday and then if you look at the the bank of England sterling ask prices in just over twenty five basis points to be easing by year end but another thing that I've known about the hearing aids market that was interesting is that the ten year gilt yields closed yesterday at zero point five four percent now that's back below the level seen before CGG vis resignation as chancellor of the exchequer at that time it was fear of potentially expansive fiscal policy you keep driving AFP gilt yields and we've not really witnessed that so far it's a global considerations to move you keep on market more than domestic drivers and I think that will probably continue to be the case in the coming weeks
European Central Bank keeps interest rates, stimulus programs on hold, launches review of strategy
"Yes the ECB is announcing its first appraisal of its inflation goal since two thousand three leaving its main refinancing rate unchanged at zero percent this is largely or completely expected leave the deposit facility rate unchanged also negative zero point five percent they say that the C. B. says that it sees a rates are present or low levels until inflation goal it gets nearer meanwhile we're seeing means inflation expectations over the next five to ten years covering a one point three percent versus more close to two percent as it is saying also the easy be announcing its first to teach a review of policy since two thousand three widely expected given the fact they have a reprieve they have an opening you have a manufacturing data coming in a little bit more solid so they can actually take this time to take a step back also we are expecting the inflation goal perhaps to change a little bit in its guidance from where it is right now in markets you're not seeing much of a response basically the euro out little changed versus the dollar I just a little bit weaker versus the dollar two year yields basically flat but really the key thing John and Tom as you were saying is really Christine Lagarde and what she has to say in this press conference whether she'll talk about possibly buying green lawns for the ECB's balance sheet whether she'll talk about how they plan to add the ammunition if inflation does not meet their goals as well as just the outlook going forward again not much of a change but we are going to hear a lot more when Christine Lagarde gets to the
European Central Bank holds rates, launches policy review
"Now in more news European central bank president Cristina god is set to launch a broad based strategy review today because of the governing council concludes its policy meeting Bloomberg reported Petrus golly Maskey has the preview now from front first the card is expected to launch the ECB strategic review and the governing council concludes its policy meeting on Thursday there anything will focus on the assessment of the inflation goal and promises to take a deep dive into new challenges such as climate change and digital currencies it's a good moment to reflect the year's owns a condom has brightened enough for the ECB to keep its makes of negative rates and quantitative easing in place for the foreseeable future in Frankfurt this cutting off steam coming they break