European Market Update - ECB Maintains Trichet's March 8th View of Economy in March

Discussion in 'Trading' started by TradeTheNews, Mar 15, 2007.

  1. TradeTheNews

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    - The European indices are currently trading higher in the session led by positive earnings reports, and takeover speculation ahead of the open, as well as a rise in investor optimism and confidence.
    - European government bonds are trading lower in the session giving up gains made in recent days as investors regain confidence and move back into equities out of the comfort of fixed income.
    - Germany left its headline CPI un-revised from the preliminary reading for the month of February as expected, however, harmonized CPI was revised up by 0.1% from the preliminary reading on both a m/m and y/y basis to 0.5% and 1.9% respectively.
    - The Swedish unemployment rate fell by more than expected to 4.8% in February, its first drop in three months. Swedish unemployment declined as growth in demand, both domestic and foreign, prompted more hiring.
    - Comments from a newspaper interview with the ECB’s Liebscher were published overnight. Liebscher reiterated that money policy is still accommodative, and that liquidity is ample. Regarding inflation, Liebscher said that price risks are seen on the upside at the end of 2007 and in 2008, pointing out that oil’s dampening effect on prices is coming to an end. Liebscher also reiterated that the ECB must act preemptively, noting that ECB rate hikes help to bolster growth. Liebscher’s comments were echoed by the ECB’s Gargans later on in the session.
    - In its monthly report for the month of March the ECB echoed Trichet’s March 8 post rate announcement press conference. The ECB reiterated that it will act in a firm and timely manner on price risks. The ECB also reiterated that liquidity is ample and that monetary policy remains on the accommodative side. The ECB said that upside inflation risks prevail in the medium term, noting that stronger than expected wage increases pose a price risk.
    - Ahead of today’s OPEC meeting a series of OPEC ministers said reported that OPEC has reached a consensus for a rollover as expected. The Libyan oil minister said that the OPEC agreement is “almost” a done deal. Contrary to comments made by a Saudi official yesterday, Iran said that OPEC would discuss quotas for Angola, its newest member.