The European Central Bank’s (ECB) July policy meeting has ended with policy-makers opting to maintain a cautious tone, presumably to keep a lid on rising Eurozone interest rates and currency. The ECB kept its deposit rate deep in negative territory and maintained monthly bond purchases at €60-billion, in line with the expectation of most analysts in a Reuters poll.
The European Central Bank (ECB) said it will set up an instant payment system across the eurozone allowing consumers and firms to send money "within a matter of seconds". The new service, TARGET instant payment settlement (TIPS), will enable citizens and firms to transfer money between each other in real time and will be available around the clock, 365 days a year. It said the new network "will allow citizens and firms to make payments via their bank anywhere in the euro area within a matter of seconds", and is scheduled to come into operation in November 2018.
According to the latest reports, the European economy grew at a stronger pace than the US economy did. Do you agree that further trend is going to be the same? I do not think so, though it is mostly because the US is likely going to pick back up again. What we saw in the first quarter, and this is something we have seen over the past few years, is that the US has a relatively weak first quarter. This could mean that growth is not going to be as spectacular as it has been over the past years in the United States. Nevertheless, I would say that, overall, the US economy is likely to pick up steam again in the Q2 and Q3. On the other hand, the Euro zone economy is performing quite steadily, while growth is sweeping quite robust at the moment. Still, I do not think that it will be able to keep up with the pace that we have seen in the United States. Currently, we expect the Euro zone growth to come in just under 2% over the year, while we think the United States GDP could hit 2.3% or maybe even 2.5% in 2017.
The idea of Italy leaving the eurozone, or 'Italexit', "does not have the slightest basis" in fact, European Central Bank President Mario Draghi said Wednesday in a verbal tussle with a Dutch MP. Draghi repeated that the euro is "irrevocable, and that's what the Treaty says". Confronted with the possibility of the Netherlands quitting Europe’s monetary union by Eurosceptic MP Thierry Baudet, an angry Mr Draghi said: “The euro is irrevocable. This is the treaty. I will not speculate on something that has no basis.” Highlighting the ECB’s role in the eurozone’s economic recovery, he said policies had helped create 4.5m jobs. “That’s the reality, the rest is speculation." In other remarks, Draghi said it was "up to the eurozone countries to prepare for the end of quantitative easing".
Sampo Terho, a former member of the European Parliament and one of the top figures of the new populist and Eurosceptic party called Peerussuomalaiset (the True Finns), is pushing for Finland’s exit from the Eurozone, an outcome he considers inevitable. Terho kicked off his party leadership campaign on Friday, telling a press conference that it was hard for Finland to keep its exports competitive because of its euro membership. "The only way to sustain our competitiveness is internal devaluation, which we carried out," he said, referring to a hard-fought labor reform that sparked anti-government demonstrations and strikes in 2015. "The other option, if looking forward to the 2020s, 2030s and 2040s, is to return to our own currency ... When we take this long look, that option seems possible, even likely," Terho said.
The Euro continued to book gains against the US Dollar during the early hours of Friday's trading session, as the currency exchange rate attempted to break through the resistance put up by the 55-day SMA, which was located at 1.0593. The pair already attempted to move higher during Thursday's trading. However, it failed to pass the SMA. Due to that and the fact that the weekly PP is located just above the SMA at 1.0604, it is most likely that the currency pair will fail once more and retreat lower by the end of Friday's trading session.
Even though the European single currency edged higher against the Japanese Yen on Wednesday, it was unable to maintain trade above the 122.00 mark, with the resistance cluster there pushing the exchange rate down again. As a result, this cluster caused the EUR/JPY cross to make a U-turn and begin moving towards the 121.20 psychological support. Technical indicators, however, are unable to confirm the possibility of the negative outcome, as they keep giving bullish signals. In this case the 121.60 handle should be considered as a possible support, as it kept the Euro from sliding down for a whole week now, suggesting trade could close above this area.
The European Central Bank (ECB) made no changes to its record-low interest rates and announced no new measures on Thursday in what was its first policy decision of 2017. Specifically, the ECB left its benchmark interest rate unchanged at a record-low 0.0%, in line with forecasts. The central bank also held its deposit facility rate steady at -0.4% and its marginal lending rate remained at 0.25%. Additionally, the Governing Council confirms that it will continue to make purchases under the asset purchase programme (APP) at the current monthly pace of €80 billion until the end of March 2017 and that, from April 2017, the net asset purchases are intended to continue at a monthly pace of €60 billion until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim.
The euro may not exist in ten years’ time if Paris and Berlin fail to bolster the single currency union. The warning has come from the French presidential candidate Emmanuel Macron in a speech at Humboldt University in Berlin on Tuesday, as cited by Reuters. Macron was economy minister under Socialist President François Hollande until he resigned this year to create his own political movement and stand as an independent candidate in this year’s presidential election. The truth is that we must collectively recognize that the euro is incomplete and cannot last without major reforms,” Macron added.
Stoxx 600 index had in the first two months of 2015 an incredible performance of about 25%, resulting the best equity index where to invest. But unluckily, in the month of April, the situation changed when the Index arrived at the 400 price level zone, a point where we had in the past, in 2000 and 2007, the beginning of two bear markets. But this time, after the third historical top, prices created a double bottom at 300. Then in 2016 we had a trending range between 300 and 350 that was broken at the beginning of December.
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