Rolling business and financial news, as Germany's top central banker says governments must 'wake up' and keep reforming.
Weidmann: interest rate cuts were right thing to do
ZEW chief: ECB cheap money creates dangers
World markets hover near record highs
9.33am BST
Germany's stock market has climbed back into positive territory to hit a new record high.
The index is up 0.14% this morning at 10,022 points -- clearly ZEW chief Clemens Fuest's warning about cheap money fuelling a bubble (see here) didn't rock the Frankfurt stock market.
Dax fresh record high
9.28am BST
We've seen some mildly encouraging eurozone economic data this morning, suggesting factories in France and Italy bounced back in April.
French industrial production rose by 0.3% month-on-month in April, and March's reading has been revised up to -0.4% from -0.7% initially.
9.21am BST
Meanwhile Greecee's deputy prime minister, PASOK chief Evangelos Venizelos, reportedly spent last last night in hospital after suffering stomach pains.
The head of the Hippocratio Hospital's cardiology unit, Christodoulos Stefanidis, told Greece's Skai TV that:
"It is related to gastroenterological disorders. He checked into our hospital for precautionary reasons."
9.15am BST
Lots happening in Greek politics today, alongside last night's cabinet reshuffle.
The leader of Greek opposition, the left-wing Alexis Tsipras, is heading to Frankfurt where he's expected to meet with ECB president, Mario Draghi.
#ECBs Draghi & Curé Set To Meet With #Greece's Tsipras Today, Discussions To Focus On Current Developments In Greece Spokesman
9.03am BST
Here's more details of Jens Weidmann's interview about the ECB's historic stimulus measures (see more here) from the Reuters terminal:
Weidmann, president of Germany's Bundesbank, said that low inflation rates since 2013 had increased the risk that further negative surprises could de-anchor the ECB's long-term inflation expectations.
"The monetary situation is different to what it was two or three years ago," he said. "The medium-term inflation outlook is significantly below our definition of price stability."
8.57am BST
Philippe Delabarre, an analyst at Trading Central in Paris, reckons stock markets will head higher through the summer, predicting:
"On a short-term basis, the momentum could slow down...But this is not going to prevent the continuation of the rise."
8.56am BST
European stock markets have inched down in early trading.
It's led by the FTSE 100 which has fallen 27 points, or 0.4%, to 6848. Germany's DAX has dipped back through the 10,00 mark (having closed there for the first time ever last night).
8.38am BST
One of Germany's top economists has warned that the European Central Bank could create a new crisis through its stimulus measures -- even as Jens Weidmann was defending it.
"I am troubled by the danger that the ECB creates with its policy of cheap money.
"We have all the ingredients of a bubble: The prices of real estate and on the stock markets rise on and on, and on the bond markets profits* are falling despite high risks."
The purchase of corporate bonds, I see not critical, provided that credit is true.
#ZEW head Fuest tells @handelsblatt concerned about build up of bubbles due to #ECB expansionary monetary policy 1/2
#ZEW head Fuest tells @handelsblatt sees probability of 95 pct that #ECB will do #QE - but for now Fuest says sees no risk of deflation 2/2
8.15am BST
Germany's top central banker, Jens Weidmann, has defended the European Central Bank's decision to impose negative interest rates on the region's banks, and offer them hundreds of billions of euros in fresh cheap credit..
"The interest rate cuts were a response to the unsatisfactory inflation outlook.
"That we took unconventional measures is both down to the fact that we have almost used up the room to cut rates, and that we wanted to ensure that our expansive monetary policy also came through to the real economy."
*WEIDMANN: NEED TO REMAIN VIGILENT TO POTENTIAL OVER-REACTIONS // so is that the new name for carry trades?
It's all over the news, but it's more impressive on the charts. 10Y Spain yield below UST yield. Thanks, @ecb. pic.twitter.com/52FD1RTGZ7
8.10am BST
Good morning, and welcome to our rolling coverage of the financial markets, the world economy, business and the eurozone.
Coming up today.... financial markets are hovering around their record highs, as the long rally refuses to peter out.
There has been plenty of talk recently around the measure China is taking including increasing spending on railways and broader infrastructure along with lowering reserve required ratios.
Confidence might just be growing that China will hit its growth target after all, not that many ever doubted this will be the case.
Brussels Econ Forum this a.m. features @ollirehn, Jorg Asmussen, #IMF Euro chief Reza Moghadan. Also hear moderator of 1st panel v handsome.
Continue reading... |
| READ THE ORIGINAL POST AT www.theguardian.com |
