The Fed burns up ammo, it needs perhaps more

After the closeout of the last week, more investors return in the European stock markets. Ambivalent feelings after the surprising, dramatic US interest rate cu

The Fed burns up ammo, it needs perhaps more

After the closeout of the last week, more investors return in the European stock markets. Ambivalent feelings after the surprising, dramatic US interest rate cut dampened their mood, however. The majority of indices to set up lunch well a percent.

The attempt of the Fed to stabilize the mood, had failed, said investment strategist Kerry Craig from the asset management of U.S. Bank JPMorgan. "The sharpness of the reaction and the unscheduled time can be interpreted as a sign that the Fed is more worried than I thought." Frank Dixmier, bond-in-chief of the asset Manager of Allianz Global Investors, doubted that interest rate cuts are the right recipe to combat the economic consequences of the Coronavirus epidemic. "In the meantime, the Fed ammo that it needs in the event of a severe recession, maybe even burns."

And what does the ECB?

the economy be more Effective currently the programs of the governments, said Andrew Gillian, financial market expert at the asset Manager, Janus Henderson. The telephone conference of Finance Ministers and Central Bank heads of the seven largest industrial countries (G7) have been previously little more than warm words, said Commerzbank analyst Antje Praefcke. "But that is not to say, of course, that nothing comes. The Virus can be all stronger together."

The ECB in terms of interest rates for the time being still. They came together on Tuesday evening to an extraordinary telephone conference to assess the situation, Reuters insiders learned. Accordingly, the governing Council discussed operational issues, a monetary policy response was, however, not on the Agenda. A Central Bank spokesman declined on Wednesday to comment.

grants for business

The next regularly scheduled interest rate meeting of the ECB governing Council for the 12. March in Frankfurt, scheduled to be held. According to insiders, the guardian of the currency, working, special injections of liquidity for smaller and medium-sized companies to raise, in order to prevent Funding shortfalls.

At the ECB conference phone has been talked about how the financial system can't handle so far, the Virus crisis, said the familiar with the Situation people. Also the question of how the ECB and 19 national Central banks in the stress case should cooperate, had been subject. Although there is currently no indication of liquidity problems. And also an increased use of Cash, let him not be ascertained. It had been discussed, as the guardian of the currency of such stress signals would react. Unlike the US Central Bank, the Fed, the ECB no longer has the interest for a lot of room. Your policy rate is already at a record low of 0.0 percent.

And the other Central banks?

With the voltage, experts are now waiting for the afternoon (16.00 CET) upcoming interest rate decision of the Central Bank of Canada: The Northern neighbor of the United States along with the USA, Japan, Germany, France, Italy and the UK, a member of the G7. The Central Bank in Ottawa had to leave the key interest rate last updated at 1.75 percent, the door for a reduction, however, left open.

think While other Central banks other measures, Hong Kong is the US model of monetary policy followed. The key rate was reduced from 2.0 to 1.5 percent, as the Hong Kong Monetary Authority (HKMA) announced on Wednesday. "The development of the epidemic is still very uncertain, there will still be a very large volatility in the financial markets," said the authority. Hong Kong's monetary policy is moving in step with the American. Reason for this is that the currency of China's special administrative region is coupled in a narrow band of 7.75 to 7.85 to the Dollar.

the price of gold rises

The world Bank has announced its emergency aid in the amount of twelve billion dollars in the fight against the Virus epidemic. Thus, States should be in addressing the medical and economic consequences of the outbreak supports, said world Bank President David Malpass on Tuesday.

From the uncertainty on the assessment of the Fed-Coups to the piling up of investors ' money into safe-haven government bonds. This pushed the yield on the ten-year US Bonds for the first time under the brand of one percent.

On the commodities market, Gold is claimed to the biggest one-day gain in three and a half years of its recent gains and cost 1639,71 dollars per Troy ounce (31.1 grams). Should prevail in the case of investors, the perception that the Fed is similar to the European Central Bank (ECB) or the Bank of Japan (BoJ) and the monetary policy reins for the long term loose, it'll fall the previous record of 1920,30 Dollar in the short or long prophesied Naeem Aslam, chief market analyst at Brokerage firm AvaTrade. (cpm/Reuters)

Created: 04.03.2020, 12:13 PM

Updated Date: 04 March 2020, 12:06

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