Markets brace for ECB guidance on debt crisis
Friday, 3 December 2010
FRANKFURT, Dec 2 (AFP): The European Central Bank kept its main interest rate at a record low of 1.0 per cent Thursday as markets awaited news on whether the ECB would amplify its monetary stimulus measures.
Investors sought signs from central bank policymakers-notably ECB head Jean-Claude Trichet-on steps they were ready to take to tame a eurozone debt crisis now threatening Spain.
Many felt the ECB would maintain or boost support for banks and governments rather than continue to wind down exceptional measures as it had initially been expected to do.
Deutsche Bank economist Gilles Moec told AFP after the rate decision that he thought the bank would prolong unlimited loans of central bank cash into the first quarter of 2011.
In addition, Trichet might make "some positive sounds on the possibility to do more but nothing quantified, nothing concrete at this stage," Moec said.
At Capital Economics, Jonathan Loynes said any announcement on the ECB's controversial purchases of government bonds "is more likely to disappoint than provide encouragement that the ECB is about to come riding to the rescue."
Investors sought signs from central bank policymakers-notably ECB head Jean-Claude Trichet-on steps they were ready to take to tame a eurozone debt crisis now threatening Spain.
Many felt the ECB would maintain or boost support for banks and governments rather than continue to wind down exceptional measures as it had initially been expected to do.
Deutsche Bank economist Gilles Moec told AFP after the rate decision that he thought the bank would prolong unlimited loans of central bank cash into the first quarter of 2011.
In addition, Trichet might make "some positive sounds on the possibility to do more but nothing quantified, nothing concrete at this stage," Moec said.
At Capital Economics, Jonathan Loynes said any announcement on the ECB's controversial purchases of government bonds "is more likely to disappoint than provide encouragement that the ECB is about to come riding to the rescue."