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thirdwave

Ecb Holds Rates

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http://www.ecb.int/press/pr/date/2008/html/pr080306.en.html

This should break the sterling's back..

On one hand the Federal Reserve cuts rates, on the other the ECB effectively raises them. The BoE tries to hold the middle ground. This shows how powerless they know themselves to be in the face of the coming debt implosion. All will fail.

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Dead cat bounce? ;)

On a more serious note, I think Trichet is putting the future of the monetory union at serious risk by being sensible and holding rates ..the rampers in Ireland and Spain won`t be very happy with his latest move and would view it as further pandering to the German camp..

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Dead cat bounce? ;)

On a more serious note, I think Trichet is putting the future of the monetory union at serious risk by being sensible and holding rates ..the rampers in Ireland and Spain won`t be very happy with his latest move and would view it as further pandering to the German camp..

I'd rather have Trichet holding the line than Bernanke bailing the banksters.

He has re-iterated what he said the other day about the FED/BUSH/Paulson saying they want a strong dollar.

Also said he sees some of the commodity markets as "cartelised" implying that they are less responsive to normal supply/demand cycles in so far as global growth/recession goes. He mentioned oil specifically.

Very clear on his commitment to a "one needle compass" i.e. seeking medium term price stability for the 320m EU citizens, not pandering to the banks.

Must admit I like the guy and the way they have a Q&A press conference.

Edited by Red Kharma

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It seems someone was expecting UK rate cuts. :unsure:

From the Inflation Report we can deduce that there will probably be 2 more UK rate cuts, in April and May. The ECB has not increased rates since June 2007, which would mean that the differential would probably narrow by 0.5%.

Although I would expect this to cause further declines in GBP, the pressure will increase on the ECB for a competitive cut.

Long periods of inactivity in rate setting often indicate a change of direction (i.e. the next move by the ECB may be down). Worth considering, especially given the level of USD/EUR exchange rates.

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It seems someone was expecting UK rate cuts. :unsure:

From the Inflation Report we can deduce that there will probably be 2 more UK rate cuts, in April and May. The ECB has not increased rates since June 2007, which would mean that the differential would probably narrow by 0.5%.

Although I would expect this to cause further declines in GBP, the pressure will increase on the ECB for a competitive cut.

Long periods of inactivity in rate setting often indicate a change of direction (i.e. the next move by the ECB may be down). Worth considering, especially given the level of USD/EUR exchange rates.

This is interesting. At the moment ECB are holding and seem to be trying to encourage the FED to support the dollar (as they say they want to) by not cutting so agressively or not at all.

BOE held; ECB held. Pressure is now on the FED.

I am increasingly of the view that the FED wont be cutting another 75bps like the "market" expects. (or is trying to force them into). Since 75bps is now the expectation anything less than that would see the dollar rally v the Euro and also see gold and oil fall.

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Dead cat bounce? ;)

On a more serious note, I think Trichet is putting the future of the monetory union at serious risk by being sensible and holding rates ..the rampers in Ireland and Spain won`t be very happy with his latest move and would view it as further pandering to the German camp..

As soon as he makes a dovish hint the pound will rally hard.

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Guest Charlie The Tramp
I am increasingly of the view that the FED wont be cutting another 75bps like the "market" expects. (or is trying to force them into). Since 75bps is now the expectation anything less than that would see the dollar rally v the Euro and also see gold and oil fall.

Strange, as I have the same feeling.

I can see holds being the norm now awaiting the inevitable future rises which IMHO will come. ;)

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I'd rather have Trichet holding the line than Bernanke bailing the banksters.

He has re-iterated what he said the other day about the FED/BUSH/Paulson saying they want a strong dollar.

Also said he sees some of the commodity markets as "cartelised" implying that they are less responsive to normal supply/demand cycles in so far as global growth/recession goes. He mentioned oil specifically.

Very clear on his commitment to a "one needle compass" i.e. seeking medium term price stability for the 320m EU citizens, not pandering to the banks.

Must admit I like the guy and the way they have a Q&A press conference.

Does he mean speculators buying into oil and other commodities to hedge against the dollar? OPEC justified thair decision not to raise production,despite Bush's remonstrations, earlier in the week by arguing that doing so would be catering to 'demand that does not exist'..I wonder if countries with shedloads of dollars are offloading most of it, in anticipation of a dollar rout, by buying oil?

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This is interesting. At the moment ECB are holding and seem to be trying to encourage the FED to support the dollar (as they say they want to) by not cutting so agressively or not at all.

BOE held; ECB held. Pressure is now on the FED.

I am increasingly of the view that the FED wont be cutting another 75bps like the "market" expects. (or is trying to force them into). Since 75bps is now the expectation anything less than that would see the dollar rally v the Euro and also see gold and oil fall.

They've boxed the fed in. The americans desperately needed to BoE and ECB to cut to give the dollar 'support', so Ben could keep on cutting. Gold and Oil may fall, but there's real demand out there for these which will limit their decline. Its the US stock market and financial system (dubious valuations and all) that's set up for a right tanking..

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They've boxed the fed in. The americans desperately needed to BoE and ECB to cut to give the dollar 'support', so Ben could keep on cutting. Gold and Oil may fall, but there's real demand out there for these which will limit their decline. Its the US stock market and financial system (dubious valuations and all) that's set up for a right tanking..

What effect would Bush's $ 140 bln (hot off the press presumably) 'stimulus' package have on the dollar? The cheques are supposed to go in the post in April-May. Would the American consumer not blow it on all the wrong things all at once, given the rapidly falling value of the dollar, thus causing a massive jump in inflation?

Edited by thirdwave

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What effect would Bush's $ 140 bln (hot off the press presumably) 'stimulus' package have on the dollar? The cheques are supposed to go in the post in April-May. Would the American consumer not blow it on all the wrong things all at once, given the rapidly falling value of the dollar, thus causing a massive jump in inflation?

That's the risk. That the american consumer is already so stretched they'll use it to either pay down debt or buy staples - food and energy, further driving up the price of these with yet more freshly-minted dollars. And likewise, the dollar will be driven down by yet more government money printing and deficit. About the only thing that one can be sure about is that it won't save the economy from meltdown..

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Does he mean speculators buying into oil and other commodities to hedge against the dollar? OPEC justified thair decision not to raise production,despite Bush's remonstrations, earlier in the week by arguing that doing so would be catering to 'demand that does not exist'..I wonder if countries with shedloads of dollars are offloading most of it, in anticipation of a dollar rout, by buying oil?

He was responding to a floor question along the lines of "do you see commodities falling due to reduced demand from the US"....His response was along the lines of "As an economist, normally yes, except in the case of those markets which are cartelised"....Clearly he meant oil.

They've boxed the fed in. The americans desperately needed to BoE and ECB to cut to give the dollar 'support', so Ben could keep on cutting. Gold and Oil may fall, but there's real demand out there for these which will limit their decline. Its the US stock market and financial system (dubious valuations and all) that's set up for a right tanking..

Interesting isn't it? Do you think this is co-ordinated behind the scenes with the FEDs full agreement or are the ECB and BOE actually forcing the FED to support the dollar more by holding their rates up? A sort of "you've created this effing mess - you sort it out" stance?

Edited by Red Kharma

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  • 297 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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