Today’s vote in the Greek parliament ended with the government short of the votes it needed to avoid elections in January. The opposition Syriza party, which wants to renegotiate the bailout, leads in opinion polls.
Which is important since Syriza opposes the austerity measures imposed by the country’s creditors in exchange for a $305 billion bailout package.
Wait ‘til next year for a big expansion of asset buying that is likely to include big purchases of sovereign debt. That was the message from European Central Bank President Mario Draghi today. Financial markets might have been hoping for more, but this is about as fast as Draghi can move while pulling reluctant members of the bank along with him.
After a year and a half of trying—and largely failing—to stimulate China’s economy by supplying more funds to the country’s banking system, today the People’s Bank of China went back to its demand side tools and cut the benchmark one-year deposit rate and the one-year lending rate for the first time since July 2012
Gold is down today on a new poll showing that Swiss voters are likely to reject a referendum that would force the Swiss National Bank to make a huge increase in its gold position. December gold futures on COMEX were down 1.57% as of noon New York time to $1178 an ounce
The drop in forecast inflation despite the European Central Bank’s initial steps to purchase assets in the bond markets, and thus to weaken the euro, and thus to raise growth and import some inflation hit the euro especially hard. The continued downward trend in inflation expectations leaves the financial markets convinced that the central bank will have to go even further in its program of asset purchases/euro weakening
The economic data is grim enough, but the financial markets aren’t behaving as if there were any chance of another “central bank surprise” when the European Central Bank meets on Thursday, November 6. The French CAC Index is down 1.62%; the German DAX is off 0.96%, and the Spanish IBEX has slumped 2.16%.
Not enough! Financial markets have responded. “We want more details.” On the news for the European Central Bank the euro has climbed against the U.S. dollar and European stock markets have plunged
And if global currency markets found the Scottish independence vote worrying, the prospect of a 2017 referendum in the United Kingdom on continued membership in the European Union will be terrifying
The tepid demand raises the odds that the bank will have to begin a program of asset purchases sooner rather than later in order to hit its goal of expanding its balance sheet back to the $3 trillion mark.
