Optimistic vaccine news improved market sentiment. Stocks and riskier assets are rising, while the US dollar is dipping down. Let’s have a closer look.
ECB will estimate health of bank credit
Next month, the European Central Bank is on the verge of reassessing the outlook for bank lending next month because there’s a likelihood that EU financial institutions could tighten credit supply and drive the current economic deceleration. That’s what Peter Praet, the bank’s chief economist uncovered.
His remarks will most probably cement market hopes for another round of multi-year ECB loans to financial institutions because existing ones worth approximately 750 billion euros start maturing in 2020, making a cliff-edge for lenders in Italy as well as other southern European nations.
The euro zone's economy has kept slowing, raising questions over ECB plans to have interest rates lifted after next summer.
Praet told that they don’t need to closely watch the transmission of monetary policy via the banking system. He added that in March they’ll come up with an assessment of the current as well as expected state of bank transmission.
In addition to this, Praet told that the ECB's Targeted Long-Term Refinancing Operations had appeared to be an extremely useful thing and they remained part of the major bank’s "toolbox".
By the way, Praet turned out to be the second ECB board member to pay much attention to the prospect of another TLTRO right after the previous week Benoit Coeure told that another round was probable.
In addition to this, the chief economist told that he actually expected the major bank’s estimates to be reduced again in March for the near term. Moreover, he drew attention to some positive things, including soaring employment and consumption.
The expert told that the EU’s key financial institution could push back the timing of its first post-crisis rate lift if required.
The main event of the day is the ECB’s monetary policy statement. Jump in to know how it will impact EUR/USD!
The European Central Bank will publish a monetary policy statement and release the main refinancing rate at 14:45 on September 10.
Follow Canadian core retail sales on September 18 at 15:30 MT time!
The US dollar gained after the Fed’s report, while riskier assets dropped. Let’s have a closer look.
Keep an eye on the UK monetary policy statement on September 17 at 14:00 MT time!