ECB Officials Agree to Counter Investor Rate-Cut Skepticism
Bloomberg 1/27/2021 Carolynn Look
(Bloomberg) European Central Bank policy makers are uncomfortable that investors appear to be largely ruling out more interest-rate cuts, and have agreed to stress that such stimulus remains a viable option, according to officials.
The Governing Council last week discussed how market pricing foresees little chance of a reduction further below zero, and concurred on the need to highlight that possibility, the officials said, asking not to be identified because the deliberations were private.
The euro extended its decline on the news before retracing those losses to trade 0.5% down on the day. Money markets brought forward bets on a five-basis-point rate cut to July, from September earlier.
EZB will Marktskepsis gegenüber Zinssenkungen zurückdrängen msn.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from msn.com Daily Mail and Mail on Sunday newspapers.
EUR/USD remains susceptible to a larger pullback as long as the Relative Strength Index (RSI) diverges with price and tracks the downward trend from December.
News From Davos: Goldman’s Solomon, ECB’s Lagarde Tout Government Stimulus
In Washington, there’s a fight over more relief, as the European Union just passed a huge aid measure.
Fiscal stimulus is vital to lift the US and European economies out of their pandemic-induced funks, according to a top Wall Street leader and high European government officials at the Davos conference.
This comes as the European Union approved a $2.2 trillion aid package for its 27 member nations. In Washington, on the other hand, newly installed President Joe Biden is getting resistance from congressional Republicans over the size of his proposed relief bill, $1.9 trillion.
Major indices worldwide rose on Monday with President Biden’s proposed $1.9 trillion stimulus package in focus. Lawmakers from both parties are lobbying for a targeted relief bill.
Futures: The Dow futures are up by 0.13%, and the S&P 500 futures are trading higher by 0.31% on the last check Monday. WTI crude futures are up by 0.63% to $52.60, while gold futures are trading lower by 0.24% at $1,851.80. Ten-year Treasury yield is flat at 1.091%. The VIX futures are down by 1.71% to 24.45.
Cryptocurrency: Bitcoin is trading higher by 1.7% at $33,264 on the last check, and Ethereum is up 4.83% at $1,408.45. Ethereum hit an all-time high of $1,480, and several other decentralized finance-based cryptocurrencies hit their all-time highs late Sunday in tandem.