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About LinkBacksDo they dare cut by 1%?Euro zone industrial production plunged for the seventh month running in November, signalling a worsening recession and strengthening market views the European Central Bank will cut interest rates deeply tomorrow.
Do they dare cut by 1%?Euro zone industrial production plunged for the seventh month running in November, signalling a worsening recession and strengthening market views the European Central Bank will cut interest rates deeply tomorrow.
0.5% for sure.
50 basis points already more or less priced in but anything more radical will see the Euro coming down to 87p. It has already pushed below 1.31 v $ and i believe 75 bp is feasible. 100 would be radical and I believe that is needed but Trichet is not radical enough.
Fianna Fail - The Loss of Sovereignty Party.
Don't think it'll be more than 50bps.
Given their usual pace of incremental change, 50bps is a fairly deep chunk off at once.
Nothing will motivate the lazy / apathetic / Americanised / west-British types to embrace their culture and the Irish language.
What will have a bigger affect on them is this: euronews | December euro zone inflation lower than expected
Eurozone inflation at 1.6% is below their target of 2% so that means they will definitely cut rates.
I think they might drop it 75 points, since they're expected to drop it 50 points to 2.00% so they'll want to make sure it's bigger then expected as when a drop is as certain as this investors take a lot of it into account before it happens but they also want to be cautious.
I think(and hope) it will be .25% cut. No cut at all would be better.
the markets are talking about deflation and its likley that we might technically get deflation numbers, but what is underlying this deflation is high food/oil prices rises of 2007/early 08 working its way through the system. Retail prices have also fallen to stimluate consumer demand and oil prices have fallen too(but from a bubble peak). The med-long term expectations for inflation are positive and I think this will guide ECB policy.
I just hope the ECB wont be brow beaten into cutting rates to please the market and/or to follow the once again flawed policies of the Fed.
They'll cut it by the amount that suits the Germans and French, thats for certain
Inflation is below their target so they want it higher. Also people are certain that there will be a cut and have factored it in therefore no cut or a .25% cut will act like raising rates.Originally Posted by euroboy
Cutting rates is like putting out the fire using petrol. Artificially low interest rates create the phony booms in the first place. Markets need time, not more poison.
Just another indicator that they have no idea what they are doing. Or maybe they do? Which one is scarier?
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I reckon between 0 and 0.25% myself. I don't see a big rate cut and a few months of no cuts would be good in my view.
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