Rolling coverage of the latest economic and financial news
- Lagarde chairs first ECB governing council today
- Expected to outline new vision for eurozone central bank
- Analyst: Lagarde may challenge governments to spend more
- Pound volatility spikes
- Aramco hits $2trn market cap
The ECB governing council’s meeting should be drawing to a close soon, with today’s decisions due to be announced in an hour and 20 minutes.
Neil Mackinnon, global macro strategist at VTB Capital, suspects that hawkish members will prevent Christine Lagarde from easing monetary policy:
“Today’s ECB policy meeting is the last of the year and the first for ECB President Christine Lagarde. A split in the ECB Governing Council, with hawks expressing concerns about the side-effects of negative interest rates, as well as the expansion in the ECB’s balance sheet, presents a challenge for Lagarde.
The markets think her hands are tied and the markets are giving only a 30% probability to a rate cut prior to September 2020. Compared with the Fed’s balance sheet expansion, it is understandable why a growing number of currency strategists are looking for a stronger euro and weaker dollar in 2020.”
Eurozone factory output has fallen again, reminding Christine Lagarde that policymakers must do more to help the Euro economy.
Industrial production across the eurozone shrank by 0.5% in October, Eurostat reports. On an annual basis, production was 2.2% lower than in October 2018.
In the euro area in October 2019, compared with October 2018, production of both intermediate goods and capital goods fell by 3.6% and energy by 2.5%, while production of durable consumer goods rose by 0.9% and nondurable consumer goods by 2.7%.