Draghi’s got a plan [Video]
|The European Central Bank (ECB) yesterday lowered its deposit facility rate by 25bp for the second time this year. But ECB Chief Christine Lagarde kept a poker face for what’s next and said that there is no commitment to a particular rate path. And mixed updates to forecasts didn’t help much either. The European officials revised their growth projections lower for the next two years and kept their inflation forecasts unchanged, but they increased their core inflation forecast for this year and the next. It was like tightening the belt on one side but loosening it on the other.
The euro gained, the yields rebounded and equities were lifted higher. Investors also tried to weigh in the 400-page proposal from Mario Draghi to revive the EU’s dormant economy.
In the US, the PPI came in higher-than-expected on a monthly basis, but lower-than-expected on a yearly basis. The US 2-year yield remains under a decent pressure, the US dollar remains sold across the board, and equities continue to recover.
Gold rallied to a fresh ATH on falling yields and softening US dollar, while crude oil tested the $70pb resistance despite unsupportive news from the IEA.
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