Eurozone economy is robust but...

20 November, 2017

Speaking at the Frankfurt European Banking Congress, ECB President Mario Draghi, commented that “although the eurozone economy was robust” recovery was still heavily reliant on stimulus from the European Central Bank. He stated that positive economic growth alone was not enough to allow the ECB to increase the pace of monetary policy normalization. The current lackluster inflation growth is causing withdrawal of stimulus to be slow. He commented that “Despite this progress on the real side of the economy, from a monetary policy perspective our task is not complete, as we have not yet seen a sustained adjustment in the path of inflation”.

On Friday, data from the US Census Bureau showed that the rate of new home construction in the US rose sharply in October. New Housing Starts rose a healthy 13.7% in October (from September), as the negative impacts of the summer hurricanes appear to have been overcome. The annualized rate climbed to 1.29 million, beating forecasts of 1.19 million. The increase ended 3 consecutive monthly declines. The more forward-looking dataset of New Home Permits rose 5.9% to a rate of 1.3 million, indicating that the housing industry is growing at a healthy pace as the US economy is strengthening.

Statistics Canada released data on Friday showing the consumer price index was up 1.4% in October compared with a year ago, following a 1.6% increase in September. The Bank of Canada, which uses a 2% inflation target in setting monetary policy, raised its key interest rate target twice this year following strong economic growth to start the year. The markets expect growth for H2 to come in at a slower pace and the BoC has suggested that while further rate hikes are likely, they will be cautious and pay close attention to the incoming economic data. The markets do not expect a rate hike until the end of Q1 next year at the earliest.

Officials from the US, Canada and Mexico have been meeting in Mexico City for the 5th of 7 planned rounds to update the North American Free Trade Agreement (NAFTA), from which President Donald Trump has threatened to withdraw. The US Administration has, apparently, made demands that other members have deemed unacceptable. With negotiations ongoing, it appears that all sides are far from agreement, which is likely to cause, in particular, volatility in MXN as Mexico appears to be the largest economic loser if the US does indeed withdraw.


Source link  
OPEC considers production cuts

Saudi Arabia, Russia and their oil-producing allies are considering a range of options to maintain stability in the oil market just weeks ahead...

More Brexit votes, pound volatility?

At the start of trading on Monday, the British pound fell 0.6%, as a crucial Saturday vote on the new Brexit plan was postponed. Prime Minister...

New Chinese stimulus promises

China continues to struggle for economic growth, as it aims to resist the effect of trade disputes with the U.S. The editor of an influential...


Best currency rally heading for a crash

The analyst who most accurately predicted the ruble's rally in the second quarter is now its most pessimistic forecaster. The Bank of Russia's switch to...

Trade truce 2.0, or new currency wars?

Tensions around trade wars subsided following news reports that both the US and China leaders are set to hold an extended meeting...

Experts predict where crude could go

A top military aide to Iran's supreme leader warned over the weekend that The first bullet fired in the Persian Gulf will push oil prices above...


Morgan Stanley sees global recession

Investors are overlooking the threat posed by the U.S.-China trade war, which could send the global economy into recession in less than a year...

Oil at $100: how will it affect economy?

Brent crude has risen about 33 percent this year and is close to the highest in six months. While higher prices due to strong demand typically reflects...

Oil sector will lose 95% by 2050

Companies in the oil and gas sector, including large groups such as Shell, BP and Exxon, could lose 95% of their value by 2050 if governments...

  


Share it on:   or