Thursday, November 6, 2008
Bags filled with low in anticipation of the cut in ECB rates today
Analysts predict that the Central Bank lowered the price of money to weather the recession to 3.25% while the most optimistic point to 3% ELPAIS.com - Madrid - 06/11/2008 Vote Result 0 votes Recession knocks at the door of the countries in the euro zone, and once to defuse tensions inflationary by cheap oil, now turn back again to lower the price of money for countries sharing the single currency. As the president of the European Central Bank Jean-Claude Trichet, announced from Madrid two weeks ago a striking change from what had been his usual caution and reservation in these areas, the Central Bank could lower rates of interest 3.75% today to revive the stagnant economy before the impact of the financial crisis in the industrial fabric of the Old Continent. The Euribor falls in anticipation of a lowering of the interest rate Interest rates GRAPH - El Pais - 30-10-2008 Historical evolution of interest rates in the European Union and United States - ELPAIS.com ECB (European Central Bank) DEPTH Headquarters: Frankfurt (Germany) Directors: Jean-Claude Trichet (President) See full coverage The news on other websites Websites in Spanish in other languages See the listing of the major stock exchanges While waiting to hear the resolution of the Governing Council and with the mystery of the size of the cut, the European shares opened the day with a sharp decline after the announcement of discounted Trichet in the past week, when it recorded up to four consecutive days up to the heat of the action and reactions from EU governments against the crisis. Specifically, the parquet Spanish lost 3.70% at the opening and fell below the 9400 points, which was placed in front of falls from the rest of places in a day which is a continuation of yesterday in the downhill Wall Street and Asian seats. In the past day, only the Spanish Ibex 35 was saved from the red numbers that toured the Old Continent. The numerous and generous support to the financial sector have received a very positive response in the equity markets, but now it is necessary to assess the question of the impact of the economic crisis, and at this point analysts and investors agree that there is still plenty data to take the pulse of the situation. On October 8, the ECB lowered rates one last time by 50 basis points, in a surprise action by and coordinated with the U.S. Federal Reserve (Fed), the Bank of England and the central banks of Switzerland, Sweden and Canada . On this occasion, the mystery is in the size of the cut. According to economists consulted by Reuters, most analysts believe the ECB will cut interest rates by 0.5% at its meeting tomorrow, which would be at 3.25%, the lowest level since October 2006. However, the figures derived from fees Euro Overnight Index Average (EONIA), which is the interest rate on offer for interbank deposits in euros, show that traders believe that interest rate cuts will be three quarters of a point percentage to 3%. If so, this would be the first time in its history that the ECB will carry out a rebate so broad. The expected reduction in rates is also leaving notes in the market value of the euro, which today has extended the downward trend of recent days against the dollar, which has seized the effect Obama to recover positions towards the common currency. Thus, at the opening had fallen to 1.2838 U.S. dollars compared with 1.3072 dollars the previous day. The ECB yesterday set the official exchange rate of the euro at 1.2870 U.S. dollars. In the markets for raw materials, a barrel of Brent crude, reference in Europe for delivery in December quoted at 60.66 U.S. dollars at the opening on the Intercontinental Exchange Futures (ICE), less than 1.21 U.S. dollars at the close of Wednesday .