Published: Sun, June 17, 2018
Markets | By Erika Turner

ECB's Bond Buying Could Return If Economic Downturn Occurs, Official Says

ECB's Bond Buying Could Return If Economic Downturn Occurs, Official Says

The ECB's president, Mario Draghi, will take questions from the discuss the bank's decision on Thursday afternoon. "It can only create damages". At various times the parties have also questioned Italy's membership in the euro itself.

That jolted financial markets last month, though Italy's new finance minister has helped calm investors by saying recently that his country has no intention to leave the currency union.

"Second, extrapolating the steady fall in unemployment the euro-zone has now enjoyed for many years, the [unemployment] rate will be back at 2007's low levels by the time the European Central Bank hikes for the first time this cycle", Peters added. Its 10-year bonds yield only 2.76 percent despite sluggish growth and a government whose officials have in the past speculated about leaving the euro. US. The ECB's 2019 and 2020 estimates remain at 1.9% and 1.7% respectively.

The Hang Seng index ended 0.9 per cent lower at 30,440.17 points, while the China Enterprises Index lost 0.7 per cent to 11,950.70 points.

The ECB announced it would end its bond-purchase program at year-end but signalled that any interest rate hike was still distant.

The program is credited with raising inflation to the ECB's target of just under 2 percent.

The pan-European FTSEurofirst 300 index rose 1.25 percent, reversing earlier losses, buoyed by big gains in interest rate-sensitive sectors like autos and utilities.

The New Zealand dollar rose against a broadly weaker euro after the European Central Bank said it may not hike interest rates until late 2019 while stronger U.S. retail sales data also helped lift the greenback.

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The currency dropped sharply within minutes of the announcement, initially falling from $1.1820 to $1.1725, to trade at 1.1638 by 4.30pm.

There's little doubt, however, that the European Central Bank stimulus program has helped heavily indebted countries like Italy borrow at unusually cheap rates.

The ECB said the monthly pace of its net asset purchases would be halved to 15 billion euros from September until the end of December 2018, at which point purchases would end.

The S&P 500 edged up and the Nasdaq reached another record closing high on Thursday after the European Central Bank said it would avoid raising interest rates until mid-2019, and data showed USA economic strength.

LONDON, June 13 (Reuters) - The dollar edged up against the euro and hit a three-week high versus the yen on Wednesday ahead of a Federal Reserve policy announcement that investors will scan for clues on how many more US rate hikes there will be this year. "As expected, the central bank is signalling an end to QE later this year via a three-month taper, albeit with an optionality to change position if the data deteriorates", Claus Vistesen, the chief eurozone economist at Pantheon Macroeconomics, said in an email.

European shares were set for their best week in more than three months on Friday as investors pushed back expectations for a rate hike after Thursday's European Central Bank policy meeting.

The bank's Euro 2.5 trillion bond-buying has been in place since 2015.

Analysts say that decisions on the exit path, which could include several intermediate steps, might come Thursday or at the next meeting, July 26.

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