Pound climbs against the Euro ahead of European Central Bank meeting

Asia stocks rise, dollar clobbered as US data points to accommodative Fed

Asia stocks rise, dollar clobbered as US data points to accommodative Fed

Therefore, a very substantial degree of monetary accommodation is still needed for underlying inflation pressures to gradually build up and support headline inflation developments in the medium term.

Market expectations are that the European Central Bank will announce a cut in the amount of bonds it is willing to buy from €60 billion to €40 billion in September, with a start date of January for that tapering.

Attention will now swing to ECB President Mario Draghi, who will hold a press conference at 2:30 p.m. Frankfurt time, or 8:30 a.m. Even so, officials differ in their views on what that means for the precise timing and pace of any withdrawal of stimulus. Market analysts expect the purchases to decrease and then end next year, and for Draghi to send a clear signal about that at the September 7 meeting.

The yield on Germany's 10-year government bond, meanwhile, was up 1 bp at 0.55 percent.

The bank's quantitive easing and low interest rates were created to fend off deflation. US government bonds prices sagged after Bernanke indicated that the economic recovery would mean the Fed could taper off its own bond-purchase stimulus. Long-term interest rates should rise.

If Draghi takes a more dovish tone the GBP EUR exchange rate could recover its recent losses and return to an uptrend.

While inflation is still sluggish, economic growth in the 19-nation eurozone has picked up strongly enough to dispel the fears of deflation that had prompted policymakers to launch the scheme.

Pittsburgh Steelers: What's next for Le'Veon Bell under franchise tag?
Pittsburgh Steelers running back Le'Veon Bell was offered "over" $12 million per year, according to NFL Network's Tom Pelissero . Instead Bell being nicknamed "The Juice", perhaps "The Gambler" is more fitting for Bell moving forward into his career.

At the time of the report, the euro has eased back 0.17% to $1.15345, having hit an intraday high $1.1557 through the Asian session.

"Since core inflation remains at 1.1 per cent, well below the ECB's 2 per cent target rate, this suggests that QE has further to go".

Payments group Ingenico jumped 5.05 percent after it agreed to buy Swedish rival Bambora from Nordic Capital for 1.5 billion euros. We know that it will get extended but they need to at least tell the markets what their plan is with that into 2018.

He added that the European Central Bank "is unlikely to provide any firm guidance" on what will happen to the bond purchases next year. Since Mario Draghi's speech in Sintra where he spoke of the possibility of "tapering" the European Central Bank have tried dampen those expectations in an effort to prevent an unwanted tightening of monetary conditions.

The ECB may this week drop a reference to its readiness to increase the size or duration of its asset-purchase programme before announcing in the autumn how and when it will start winding down its bond buying.

Analysts think the central bank will have to taper off the purchases next year no matter what because it will start running out of eligible bonds to buy. That is to avoid charges that it is dominating the market for that country's debt and propping up government finances, something it is legally restricted from doing.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.