fbpx

ECB Rate Cut and QE Boost Was Short-lived As Doubts Remain

German bond yields and the euro rebounded on Thursday and European banking shares were whipsawed as doubts crept in about the effectiveness of the ECB’s decision to cut interest rates and pledge an indefinite supply of asset purchases.

The ECB cut its deposit rate by 10 basis points to a record low of -0.5%, promised that rates would stay low for longer and said it would restart bond purchases at a rate of 20 billion euros a month from Nov. 1.

It also eased the terms of its long-term loan facility to banks and said it would introduce a multi-tier deposit rate facility to help them.



The package of measures initially cheered investors whose expectations for aggressive easing had recently been dented by some ECB policymakers’ comments.

Italy’s 10-year bond yield fell to a record low at 0.76%, pushing the gap over German peers to 136 basis points — its tightest since May 2018 while German long-dated bonds saw yields tumble as much as 11 basis points on the day.

But over the course of Mario Draghi’s press conference, German borrowing costs crept higher while the euro rose off lows

via Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.

Alfonso Esparza

Latest posts by Alfonso Esparza (see all)
Original author: Alfonso Esparza
Gartley Patterns Survives ECB Volatility
US Inflation Firming Up but will Not Derail Fed Ra...
 

Quick Post

What would you like to share today?
You can also favorite these post types to have quicker access
Photos
Files
Link
Status
Photos
Files
Link
Share and stream what's new to our social channels...
  Add photos   Click or drop photos here to upload.
Pending Preparing to upload... Uploading... Upload failed. (see details) Upload completed.
( left)
Add files Click or drop files here to upload
Type a hashtag to start searching for tags
Keyword does not match any tags
Type a name of your friend
No friends found by that name
Keyword does not match any emoticons
 
     
 

Broker Search

Latest Spot Rate

 
Wait a minute, while we are rendering the calendar
How It Works | About | Contact | Contributors | Privacy Policy | Advertise
© 2009 - 2020 ChatPips. All Rights Reserved. Terms of Use: The content on this website is solely for educational and informational purposes and is not a substitute for official documentation of the original owners. This site is not operated by, sponsored by, endorsed by, or affiliated with any parties in any way. The website owner, the authors, the publishers, and all affiliates of ChatPips.com assume no responsibility or liability for your trading and investment results. You should always check and confirm with several sources with your licensed financial advisor and tax advisor to determine the suitability of any investment before making your final decision. Your continued usage and browsing of information on this website constitute your agreement to this Terms of Use. If you do not agree, please do not proceed to use this website. Brokers Directory: The companies license information were obtained from respective local jurisdiction. All other company and/or product names are trademarks and/or registered trademarks of their respective owners.