ECB Member of the Executive Board Isabel Schnabel discusses the Governing Council's policy options for its December meeting from the virtual ECB Forum on Central Banking. It was noted that recent equity price developments suggested that markets might have started pricing in the adverse impact on the banking system of the resurgence in COVID-19 infections, as evidenced by the underperformance of financial sector share prices. In particular, it was regarded as positive news that additional fiscal stimulus was being announced at the same time as new measures to contain the spread of the virus. Overall, members considered the risks surrounding the growth outlook to be clearly tilted to the downside. Members were of the view that in the period ahead containment measures could be expected to become more stringent and to last longer than previously anticipated. 500 James Robertson Parkway, Davy Crockett Tower, Nashville, Tennessee 37243-0582 | Telephone: (615) 253-2164 | Fax: (615) 401-7642 | Email: Euro Area: ECB ramps up quantitative easing at June meeting June 4, 2020 On 4 June, the European Central Bank (ECB) stepped up its efforts to shore up the economy from the fallout of the global health crisis and prevent financial shockwaves. It was remarked, however, that the results of the bank lending survey should not be over-interpreted or overstated in view of the very substantial credit easing observed in the second quarter, underpinned by state-guaranteed lending. Author: Eamonn Sheridan | … Share. However,QNB considers this move unlikely because it would further reduce the profitability of Euro area banks, which find it difficult to pass-on negative interest rates to depositors and other sources of funding. ** In accordance with Article 284 of the Treaty on the Functioning of the European Union. Once the impact of the pandemic faded, a recovery in demand, supported by accommodative monetary and fiscal policies, would put upward pressure on inflation over the medium term. Weaker balance sheets and increased uncertainty about the economic outlook were weighing on business investment. Home Financial news ECB July 2020 meeting. The main challenge now is how rapidly the vaccine can be mass-produced, and at what cost, to enable sufficient vaccinations to reach herd immunity. Looking ahead, PMI new export orders signalled a continuation of the recovery in euro area goods exports, whereas the rebound in euro area services exports seemed to be fading, particularly in countries which relied heavily on tourism. Market-based indicators and survey-based measures of longer-term inflation expectations remained broadly unchanged at low levels. 05:02 Fri, Nov 13 2020 … We are always working to improve this website for our users. (Bloomberg) -- European Central Bank policy makers would probably agree to extend their pandemic bond-buying program by a full year until the middle of 2022 if … Key figures and latest releases at a glance. Nevertheless, it was clear that while some sectors – such as manufacturing and construction – would be less affected in the euro area than had been the case in the more general lockdowns earlier in the year, others – such as entertainment and leisure or tourism – would be heavily affected by the new restrictions. The ECB is … In its communication, the Governing Council needed to: (a) stress that the incoming information signalled that the euro area economic recovery was losing momentum and that the rise in COVID-19 infections and the associated intensification of containment measures was weighing on economic activity, constituting a clear deterioration in the near-term outlook; (b) emphasise that measures of underlying inflation were declining and that inflation pressures were expected to remain subdued on account of weak demand, lower wage pressures and the past appreciation of the euro; (c) underline that in the current environment of risks clearly tilted to the downside, the Governing Council would carefully assess the incoming information, including the dynamics of the pandemic and developments in the euro exchange rate, and that the new round of Eurosystem staff macroeconomic projections in December would allow a thorough reassessment of the economic outlook and the balance of risks; (d) highlight that on the basis of this updated assessment, the Governing Council would recalibrate its instruments, as appropriate, to ensure that financing conditions remained favourable to support the economic recovery and counteract the negative impact of the pandemic on the projected inflation path, thereby fostering the convergence of inflation towards its aim in a sustained manner, in line with its commitment to symmetry; and (e) emphasise that an ambitious and coordinated fiscal stance remained critical in view of the sharp contraction in the euro area economy and the reduction in private demand. The Peninsula newspaper provides extensive news coverage, incisive analyses and trenchant commentary from around the world, but with firm roots and primary focus on life in Qatar. With regard to the monetary analysis, members broadly agreed with the assessment provided by Mr Lane in his introduction that broad money (M3) growth continued to reflect domestic credit creation and the ongoing asset purchases by the Eurosystem. At the same time, it was underlined that more than half of the PEPP envelope was still available to conduct ongoing purchases in a flexible manner in case of renewed market turbulence. For instance, the service sector PMI in the four largest Euro area economies has drifted lower and now indicates contraction. Prior to the Fed's decision, market expectations on Monday were pricing in a 10 basis point rate cut at the European Central Bank's April meeting and … As a result, growth figures for 2021 as a whole could be adversely affected. Reference was made to the level of the composite output PMI, which had fallen below 50, and to the fact that the PMI for new business had fallen back even more strongly. Taking into account the foregoing discussion among the members, upon a proposal by the President, who ascertained that the decisions and proposed communication were supported by all members, the Governing Council took the following monetary policy decisions: The members of the Governing Council subsequently finalised the introductory statement, which the President and the Vice-President would, as usual, deliver at the press conference following the end of the current Governing Council meeting. With regard to price developments, there was broad agreement with the assessment presented by Mr Lane in his introduction. Global financial conditions were broadly unchanged in both advanced and emerging economies. Author: … However, the momentum had slowed more recently and downside risks were related to increasing COVID-19 infection rates globally and to geopolitical factors. It was considered important to ensure that the protracted period of lower inflation in the short run did not lead to lower medium and long-term inflation expectations. Unlike in spring, however, so far there had been no widespread flight into safe-haven assets. It was emphasised that, in the present environment, monetary policy in part operated by facilitating fiscal expansion through keeping financing costs affordable, and both policy domains were working “hand in hand”. Moreover, by that time, draft national budgetary plans and their assessment by the European Commission should also have become available, together with further indications on the prospective use of NGEU funds. Meeting of 18 March 2020 Account of the monetary policy meeting of the Governing Council of the European Central Bank held by means of a teleconference on Wednesday, 18 March 2020 1. Review of financial and economic developments and policy options. There was not a single euro area country that was not benefiting from negative yields, in most cases extending out to the three-year maturity. Since the Governing Council’s September monetary policy meeting, the exchange rate of the euro had remained broadly stable both against the US dollar and in nominal effective terms. This has helped lower the risk spread between countries in northern Europe with low bond yields, and countries in southern Europe with higher bond yields. The Governing Council’s monetary policy meeting is held every six weeks, with the next meeting scheduled for Thursday 12 March 2020. The October bank lending survey signalled a tightening of credit standards, primarily related to a deterioration in banks’ perceptions of the risks underlying the macroeconomic environment and borrowers’ creditworthiness. Discover more about working at the ECB and apply for vacancies. However, it was unclear whether the liquidity buffers that firms and households had built up in recent months would prove to be sufficient to withstand a renewed deterioration in the economy in the period ahead. It was highlighted that uncertainty remained very high, as it had been throughout the year. Introductory statement to the press conference of 29 October 2020. Ms Schnabel reviewed the financial market developments since the Governing Council’s previous monetary policy meeting on 9-10 September 2020. The Bank also reaffirmed its emergency … This provided tangible evidence of how the common European response to the crisis had helped to alleviate pressure on euro area sovereign funding and hence financing conditions. The Minister of State and Chairman of Qatar Free Zones Authority (QFZA), H E Ahmad Al Sayed, yesterday participated at a discussion hosted by the Los Angeles World Affairs Council & Town Hall. Wed 28 Oct 2020 22:34:55 GMT. European Central Bank Meeting Dates in 2019 and 2020 In normal circumstances, the ECB’s Governing Council holds two meetings every month in Frankfurt am Main in … Ensuring that every citizen can effectively access the life-saving power of 911. Bank lending rates remained very favourable, close to their historical lows. The euro area risk-free curve was close to its flattest ever level, while the euro area GDP-weighted sovereign yield curve had shifted down further since the September monetary policy meeting. QNB’s analysis considers the outlook for economic growth and inflation before delving into the monetary policy tools available to the policymakers sitting on the European Central Bank’s Council. Financial vulnerabilities in the corporate sector, in particular, could have negative ramifications for banks’ balance sheets and give rise to adverse real-financial feedback loops. The outlook is likely to remain bleak until next spring despite some good news about the efficacy of the vaccine from Pfizer and BioNTech. FRANKFURT—The European Central Bank’s chief economist plans to place private calls to banks and investors after the ECB’s policy meeting next week, he said 2 December, continuing an unusual communications practice that has raised eyebrows among financiers and central-bank officials. The Governing Council would also continue to provide ample liquidity through its refinancing operations. The relatively muted reaction of markets to the second wave of the pandemic was seen as evidence of the effectiveness of the ECB’s monetary policy measures in containing tail risks, including the risk of market fragmentation. Looking ahead, while the uncertainty related to the evolution of the pandemic was likely to dampen the strength of the recovery in the labour market and in consumption and investment, the euro area economy should continue to be supported by favourable financing conditions and an expansionary fiscal stance. There had been a strong negative correlation between euro area sovereign spreads and US stock price developments in the weeks before the current meeting. Select the meeting type that best meets your need: It could not be excluded that the euro area, or at least some countries, would experience a double-dip recession. October 11, 2020, 9:19 AM EDT ... ECB to Decide ‘Meeting by Meeting’ on Stimulus, Lane to WSJ By . Fiona Cincotta October 29, 2020 3:37 AM The ECB is not expected to make any immediate to changes to monetary policy this week, although the Euro has been skidding lower across the week in anticipation of a dovish meeting. Furthermore, other near-term risk events were looming, including geopolitical risks. The ECB’s main tool is asset purchases, often referred to as quantitate easing (QE). As in March, the economic situation was once again changing rapidly. We think an extension of favorable TLTROs, an increase in PEPP by up to 500bn euros, and an emphasis on the role of the asset purchase program … Negotiated wage growth, which was not directly affected by changes in hours worked, had declined only gradually, with the few wage agreements that had been concluded over recent months pointing to lower wage increases. Against this background, members argued that, looking ahead, it would be important to consider the possibility that the pandemic might have longer-lasting effects both on the demand side and on the supply side, reducing potential growth. Rising COVID-19 infection rates were seen as undermining confidence again and leading to additional containment measures, generating a loss in growth momentum in the fourth quarter earlier and at a faster pace than had been foreseen. Join roundtables discussions after each conference session; Arrange 1-2-1 meetings with our expert speakers and other delegates The Governing Council’s monetary policy meeting is held every six weeks, with the next meeting scheduled for Thursday 10 December 2020. It has two types of meetings: a monetary policy meeting, held every six weeks, and a non-monetary policy meeting in which it discusses the other responsibilities of the ECB. Moreover, account should also be taken of changes in the consumption basket, which implied that inflation might actually be slightly higher than reported. However, the view was expressed that the probability that inflation rates would be closer to the severe scenario included in the September staff projections was increasing, even if no additional negative surprises were to materialise. Bert Colijn. The five-year forward inflation-linked swap rate five years ahead stood at 1.16% on 26 October 2020. The pandemic had triggered a major increase in non-financial corporate debt ratios in relation to gross operating surplus, both in gross terms and net of liquid assets. The euro area unemployment rate, which had increased from 7.2% in February to 8.1% in August, likely underestimated the ongoing adjustment in the euro area labour market. ... data will then be retained by the Congress secretariat for the purposes of informing you about activities and future meetings. The council’s decisions are always announced via press release at 1.45pm CET on the day of the meeting, followed by an ECB press conference at 2.30pm CET. European inflation remains soft ahead of Dec ECB meeting; another 'key' week for Brexit talks ANALYSIS | 11/30/2020 12:34:21 PM Net purchases under the asset purchase programme (APP) would continue at a monthly pace of €20 billion, together with the purchases under the additional €120 billion temporary envelope until the end of the year. These purchases contributed to easing the overall monetary policy stance, thereby helping to offset the downward impact of the pandemic on the projected path of inflation. The Governing Council assembles twice a month in Frankfurt, Germany. 2020-07-162020-07-16 By In the euro area, by contrast, inflation expectations had trended lower since the Governing Council’s previous monetary policy meeting, thereby also putting downward pressure on yields. Thursday December 3, 2020 10:54 am. 3 - Top LHS) - if we exclude this … Thursday’s ECB policy meeting and press conference will likely play an important role in the future direction of the single currency although it may be talk rather than action that sets the tone. At the same time, it was recalled that the economy had rebounded very strongly after the lockdowns in the first wave of the pandemic and that a similar dynamic recovery might be expected in the future. In September, the ECB estimated a contraction of 8% in euro zone GDP this year, followed by a rebound of 5% in 2021. The surveyed banks also reported a fall in loan demand from firms in the third quarter, reflecting a decline in emergency liquidity needs and weakening corporate investment. Published on November 26, 2020, 7:27 AM EST Updated on November 26, 2020, 8:13 AM EST Equity markets, where policy support was least direct, had experienced a marked correction. 23 January 2020 At today’s meeting the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and … On one side, reduced risks of a contested presidential election in the United States and expectations of a large fiscal stimulus programme under a potential Biden presidency had boosted risk sentiment and revived the reflation trade. The first reason related to risk sentiment. ECB policy announcement due Thursday 29th October; rate decision at 1245GMT/0745CDT, press conference 1330GMT/0830CDT. Looking at survey-based longer-term inflation expectations, as reported in the latest ECB Survey of Professional Forecasters (SPF), inflation expectations five years ahead had remained broadly stable at around 1.6%-1.7%. If more has to be done, we will do more”. The President started the meeting by observing that, while the policy measures taken by the Governing Council at its monetary policy meeting … Concerns were also expressed about the possibility of non-linear effects arising from financial amplification channels and about the impact of the pandemic on balance sheet positions of firms, households, banks and governments, particularly given the persistence of the crisis. Oil prices had increased slightly, by 1.8%, since the Governing Council’s September monetary policy meeting, to stand at USD 39.8 per barrel on 26 October 2020, after trading in a narrow range. Policy support remained decisive for favourable credit conditions. Provided that the funds were deployed for productive public spending and accompanied by productivity-enhancing structural reforms, the NGEU programme would contribute to a faster, stronger and more uniform recovery and would thereby enhance resilience and the growth potential of EU Member States’ economies, supporting the effectiveness of monetary policy in the euro area. Credible relationships and flexibility – how... Divorces have lasting effects on children’s... Qatar, UN celebrate 75th United Nations Dayq. We should also bear in mind the interaction between monetary and fiscal policy. While activity in the manufacturing sector had continued to recover, activity in the services sector, which was most affected by the new restrictions on social activities and mobility, had been slowing visibly. Doha: The Euro area is struggling with a resurgence of Covid-19 now that the weather is colder and people are spending more time together indoors, which increases the rate of infection of the virus. Since March, Philip Lane, the chief economist, has spoken … In this context, it could be emphasised that monetary policy was removing obstacles to the expansion of fiscal policy by supporting favourable financing conditions and the proper functioning of financial markets. The impact of the latest developments in growth and inflation on the medium-term outlook for inflation would have to be carefully evaluated in the December projections. Find out how the ECB promotes safe and efficient payment and settlement systems, and helps to integrate the infrastructure for European markets. The curve was now measurably below the pre-pandemic level and firmly in negative territory up to the ten-year maturity. It was noted that the restrictions being implemented now tended to be more targeted than in the spring, either at regions or at sectors, and could therefore have a more limited effect on activity than earlier in the year. Accordingly, the amplification of adverse real-financial feedback loops remained a material risk and needed to be closely monitored. Although fiscal policy measures were supporting households and firms, consumers were cautious in the light of the pandemic and its ramifications for employment and earnings. It was noted that taking monetary policy decisions in December would be consistent with prevailing market expectations. As regards the external environment, members broadly shared the assessment provided by Mr Lane in his introduction. This was also clearly visible in corporate bond markets. Friday, December 4, 2020 9:37 AM EST ... (ECB) meeting scheduled for next Thursday. The Governing Council continued to expect monthly net asset purchases under the APP to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it started raising the key ECB interest rates. Thomas Lohnes. To side-step constraints on pre-existing programs, the ECB launched its Pandemic Emergency Purchase Program (PEPP) in March 2020 with €750bn, before increasing it by €600bn in June. The Governing Council would continue its purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of €1,350 billion. AUD/USD Rate Approaches Yearly High Ahead of RBA’s Last 2020 Meeting. At present, euro area firms’ cash coverage was nearly four times higher than at the height of the global financial crisis. So far, the sharp rise in new cases has translated into relatively fewer severe cases needing hospital treatment and also a lower death rate. ECB's Lagarde cautioned against an immediate economic impact from a Covid-19 vaccine, while giving more details about what the central bank is likely to do next. QNB expects the ECB to extend the availability of the facility from June to end-2021. Fiscal plans for 2022 remained very uncertain, but the Next Generation EU (NGEU) programme could provide additional fiscal support for the economy. EUR / USD Conflicted ahead of ECB meeting; Fibonacci Support holds bears at bay; Price action awaits high impact economic events; Visit the DailyFX … Dig deeper into the ECB’s activities and discover key topics in simple words and through multimedia. Against this backdrop, concerns were expressed about a likely increase in non-performing loans and a heterogeneous impact of the pandemic on the banking sector across countries. Looking ahead, the outlook for services was gloomy, while industry appeared more resilient. As regards financial conditions in the euro area, the EONIA forward curve remained slightly inverted, but there were no firm expectations of an imminent rate cut. External finance had recorded steep increases since the onset of the crisis, driven by both bank lending and corporate bond issuance. 9 July 2020 ECB preview: The breather meeting . Regarding fiscal policies, the fiscal stance was expansionary in 2020 and the latest fiscal plans for 2021 foresaw larger support than previously expected. The degree of accommodation currently embedded in euro area sovereign bond markets was practically unprecedented since the global financial crisis, both in its scale and its breadth across countries. Meeting of 28-29 October 2020 Account of the monetary policy meeting of the Governing Council of the European Central Bank held in Frankfurt am Main on Wednesday and Thursday, 28-29 October 2020 1. 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