U.S. Markets open in 1 hr 58 mins

ECB Cuts its Euro-Zone Growth Forecast, Attributes Rate Cut to Inflation

Benjamin Spier

THE TAKEAWAY: ECB cuts its Euro-zone growth forecast to -0.4% for 2013 -> ECB says inflation rate allowed the rate cut -> Euro trading higher


The European Central Bank lowered its growth forecast for 2013 to -0.4% from a previous estimate for 0% growth, and the growth forecast for 2014 was cut from 1.1% to 1%. Furthermore, this year’s inflation forecast was cut to 1.7% from 1.8%, and inflation for 2014 is now forecasted at 1.6%. The ECB’s monthly bulletin further said that risks to Euro-zone economic growth remain to the downside, while the risk to inflation is balanced.


The comments from the May bulleting largely matched Draghi’s comments following this month’s monetary policy decision to cut the interest rate by 25 points to 0.50%. The bulletin said the lower inflation, reported at a three year low of 1.2% in April, allowed the ECB to cut the interest rate. The bulletin further said that lowering borrowing costs will help a recovery later in the year. The bulletin further said that monetary policy will remain accommodative for as long as needed.


Talk of dovish monetary policy and lower growth is usually Euro negative, but most of the bulletin’s comments were already apparent to the market and therefore did not affect Forex trading. In fact, the Euro rose a bit in the minutes following the release to 1.3175 against the US Dollar. A two month high at 1.3242 may continue to provide resistance.


The Euro rose earlier in the session following some optimistic comments by Greek Finance Minister Stournaras. He said that Greece will return to the markets by the end of 2014, and that the country may receive some further debt relief.


The Pound may see volatility later in the session on the announcement from the Bank of England’s meeting on monetary policy for May. Expectations are for the asset purchase target and inflation rate to remain unchanged.


(How does a Currency War affect your FX trading? Take our free course to find out!)


EURUSD Daily: May 9, 2013


ECB_Cuts_its_Euro-Zone_Growth_Forecast_Attributes_Rate_Cut_to_Inflation_body_eurusd_daily_chart.png, ECB Cuts its Euro-Zone Growth Forecast, Attributes Rate Cut to Inflation

Chart created by Benjamin Spier using Marketscope 2.0


-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to bbspier@fxcm.com .







DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

  • Prince William Might Have Just Hinted at the New Royal Baby's Name
    News
    Time

    Prince William Might Have Just Hinted at the New Royal Baby's Name

    Speculation about the name of the new royal baby has run rampant — and it’s possible that Arthur might be the winning guess. According to some Twitter accounts, the Duke of Cambridge said, “There’s Arthur, there he is,” while pointing to a photographer who works for The Sun, a popular British tabloid. The photographer in question, Arthur Edwards, is referred to as a “veteran” in his field, so would be known by sight to the royals.

  • The only reasons to stay with the iPhone right now have nothing to do with the iPhone
    Technology
    Quartz

    The only reasons to stay with the iPhone right now have nothing to do with the iPhone

    My iPhone X is fine. I picked up the $1,000 rectangle of glass and aluminum on launch day. I’ve been on Apple’s upgrade program since it launched in 2015, which means I pay a monthly fee, currently $56, and get each new iPhone as it’s released every year. I switched my main phone from Android to iPhone in 2014, with the launch of the iPhone 6. I’ve been there through the iterative years of the designs with the iPhone 6, 6s, 7, and 8. I’ve continued to pay for these phones, because, as my colleague Akshat recently put it, “Apple was producing the best damn phones in the market.” But Apple no longer has a monopoly on quality. Samsung’s most recent phones were my favorites of last year, and for

  • How Nick Saban Keeps Alabama Football Rolling
    News
    Fortune

    How Nick Saban Keeps Alabama Football Rolling

    Nick Saban knows what he’s doing isn’t normal. The University of Alabama football coach is well aware that it’s anything but typical for one school to thoroughly dominate a major sport the way his Crimson Tide has ruled college football over the past decade. “To me it takes a completely different mindset to stay successful as opposed to what you have to do to build something to be successful,” says Saban.

  • Trump's revenge: U.S. oil floods Europe, hurting OPEC and Russia
    Business
    Reuters

    Trump's revenge: U.S. oil floods Europe, hurting OPEC and Russia

    MOSCOW/LONDON (Reuters) - As OPEC's efforts to balance the oil market bear fruit, U.S. producers are reaping the benefits - and flooding Europe with a record amount of crude. Russia paired with the Organization of the Petroleum Exporting Countries last year in cutting oil output jointly by 1.8 million barrels per day (bpd), a deal they say has largely rebalanced the market and one that has helped elevate benchmark Brent prices close to four-year highs. Now, the relatively high prices brought about by that pact, coupled with surging U.S. output, are making it harder to sell Russian, Nigerian and other oil grades in Europe, traders said.

  • Koch network success in Trump era draws Democratic pushback
    Politics
    Associated Press

    Koch network success in Trump era draws Democratic pushback

    The sprawling network funded by the billionaire Koch brothers is having a very good run with President Donald Trump in the White House and Republicans in control of Congress. A conservative judge is seated on the Supreme Court. Democrats are increasingly questioning how far the network's influence extends into the White House, casting the groups' backing by industrialists Charles and David Koch as puppeteers behind Trump's agenda and hoping to rouse their own donors to fight back.

  • Reddit co-founder: My wife Serena Williams and I want our...
    News
    CNBC Videos

    Reddit co-founder: My wife Serena Williams and I want our...

    Reddit co-founder Alexis Ohanian joins a growing list of tech luminaries who believe that limiting screen time fosters better psychological and social development.

  • GE's Q1 Performance Proves the Doubters Wrong
    Business
    Motley Fool

    GE's Q1 Performance Proves the Doubters Wrong

    Shares of industrial giant General Electric (NYSE: GE) have plunged over the past year due to deteriorating performance in the company's power business -- historically its largest segment by revenue -- and investor fears about hidden liabilities in the GE Capital financing business. Last Friday, General Electric silenced many of its critics with solid first-quarter results. While the company still faces earnings pressure from the power and GE Capital segments, the valuable aviation and healthcare segments are performing very well.

  • Tax bill will slash by half the number of homeowners claiming the mortgage deduction
    Business
    CNBC.com

    Tax bill will slash by half the number of homeowners claiming the mortgage deduction

    Tax returns using mortgage interest deduction Already, the deduction was not used by most taxpayers. Of the 150 million or so tax returns the IRS has received annually in recent years, just 20 percent claimed the deduction, according to research from the Urban Brookings Tax Policy Center. The anticipated drop is largely due to the near-doubling of the standard deduction that took effect Jan. 1 under the new tax law. Fewer taxpayers are expected to itemize their deductions, which is the only way to take advantage of the tax break for interest paid on mortgages. The new report estimates that 18 million households will itemize deductions this year, down from 46.5 million last year. Taxpayers would

  • Bitcoin Cash has risen 80% over the last week
    Business
    Business Insider

    Bitcoin Cash has risen 80% over the last week

    Bitcoin Cash is up 17% against the dollar on Monday. The cryptocurrency has risen 80% over the last seven days. An upcoming 'fork' of the currency — a change to its underlying code — appears to be supporting the price rally. Follow the live Bitcoin Cash

  • US brands suffer collateral damage in Chinese corporate war
    Business
    Associated Press

    US brands suffer collateral damage in Chinese corporate war

    It was looking like a banner year for business in China. The U.S. clothing company was expecting a 20 percent jump in online sales on Alibaba's Tmall, thanks to the e-commerce giant's massive reach. The company refused to sign an exclusive contract with Alibaba, and instead participated in a big sale promotion with its archrival, JD.com Inc. Tmall punished them by taking steps to cut traffic to their storefront, two executives told The Associated Press.

  • What We Know About Sean Hannity's Shell Companies and Why It Matters
    Politics
    Fortune

    What We Know About Sean Hannity's Shell Companies and Why It Matters

    Fox News anchor Sean Hannity had a bad week. Last Monday, a lawyer representing Donald Trump’s personal attorney, Michael Cohen, said that Hannity was one of Cohen’s three clients. Cohen is under investigation in relation to a payment he reportedly made to adult film star Stormy Daniels on behalf of then-candidate Trump.

  • Korean Air heiresses to resign as smuggle probe widens
    News
    Associated Press

    Korean Air heiresses to resign as smuggle probe widens

    Korean Air Lines said Monday that two daughters of its chairman will resign from their executive positions amid mounting public criticism over the women's behavior and allegations that the family engaged in smuggling. An official at the Korea Customs Service, meanwhile, confirmed that authorities raided the airline's headquarters in Seoul seeking evidence on alleged smuggling and tariff evasion. Chairman Cho Yang-ho announced the resignation of his daughter Hyun-ah, who returned to leadership last month after a four-year hiatus following a "nut rage" scandal, and her younger sister Hyun-min, who is under investigation for allegedly hurling a cup of water at a business meeting.

  • 2020 Democratic presidential candidate calls for universal basic income
    U.S.
    Fox Business Videos

    2020 Democratic presidential candidate calls for universal basic income

    2020 Democratic presidential candidate Andrew Yang on his plan to offer universal basic income to all Americans between the ages of 18 to 64.

  • AT&T Defends Time Warner Deal's Cost Savings From U.S. Assault
    Business
    Bloomberg

    AT&T Defends Time Warner Deal's Cost Savings From U.S. Assault

    AT&T Inc. attacked the U.S. government expert who disputes the company’s claim that its takeover of Time Warner Inc. would lead to $2.5 billion in cost savings. Rob Walters, a lawyer for AT&T, tried Monday to undermine the Justice Department’s expert, Ronald Quintero, saying he ignored AT&T’s history of successfully integrating companies and achieving projected savings. Walters also said that in a separate case in which he testified as an expert, Quintero’s testimony was "utterly discredited" by a judge.

  • A Smarter Nvidia Corporation Play for a Potential 500% Return
    Finance
    InvestorPlace

    A Smarter Nvidia Corporation Play for a Potential 500% Return

    According to some market pundits, issues like Apple Inc.’s (NASDAQ:AAPL) woes, China trade war concerns and today’s much more volatile and erratic cryptocurrency market can all be fingered as reasons why investors should stay away from Nvidia stock. If you’re a buyer of those markets, Nvidia — whose chips are leaders in all those areas — should sound attractive. This appears to be the case for Nvidia stock right now–and that’s good news for bulls.

  • 5 Home-Buying Mistakes I Never Knew Before Becoming a Realtor
    News
    GoBankingRates

    5 Home-Buying Mistakes I Never Knew Before Becoming a Realtor

    Today, I don’t work in real estate, but I was an agent for many years during my 20s and early 30s. Click to read more about common real estate myths you should know. Here are five home-buying mistakes that I never knew before becoming a real estate professional.

  • Investors Are Dumping Altria Group Inc Stock Without Looking at the Facts
    Finance
    InvestorPlace

    Investors Are Dumping Altria Group Inc Stock Without Looking at the Facts

    The usually reliable Altria Group Inc (NYSE:MO) is off to a horrific start this year, with MO stock shedding 18%. For technical analysts, the recent break below $60 was highly discouraging. In short, MO stock must regain its footing quickly due to the significant technical damage.

  • IBM Plunges: 5 Reasons to Buy, 5 Reasons to Sell
    Business
    Motley Fool

    IBM Plunges: 5 Reasons to Buy, 5 Reasons to Sell

    Shares of IBM (NYSE: IBM) plunged nearly 8% on April 18, after the tech giant reported its first-quarter earnings. Big Blue's numbers initially looked solid, topping analyst estimates on both the top and bottom lines. But upon digging deeper into the 

  • Finance
    InvestorPlace

    Kinder Morgan Inc Finally Gives Investors What They Want

    Pipelines were supposed to be safe tollways that produced plenty of cash flows. Kinder Morgan stock has pretty much languished since that fateful day. Moves to right the ship at Kinder Morgan have begun to work and KMI has finally given long-suffering shareholders what they wanted all the time — a big return to dividend growth.

  • 3 High-Yield Stocks Still Worth Buying
    Business
    Motley Fool

    3 High-Yield Stocks Still Worth Buying

    Here's why you should consider adding Corning (NYSE: GLW), Cisco Systems (NASDAQ: CSCO), and Seagate Technology (NASDAQ: STX) to your dividend portfolio. Steve Symington (Corning): Corning's annual dividend yield isn't exactly jaw-dropping, at around 2.6% as of this writing, but with shares down more than 20% from their 52-week high, the glass technology specialist's growing payout has become much more attractive than it was at the start of the year.

  • Princess Charlotte and Prince George Have Very On-Brand Reactions to Their New Baby Brother
    News
    Time

    Princess Charlotte and Prince George Have Very On-Brand Reactions to Their New Baby Brother

    When it was revealed that Kate Middleton gave birth to the newest member of the royal family on Monday, April 23, there were plenty of people filled with excitement at the news, but no reaction was as precious as the ones that siblings Prince George and Princess Charlotte had about their new baby brother. The little prince and princess, who were spotted on their way to visit their mother and the new baby in the Lindo Wing at St. Mary’s Hospital in London, gave two very on-brand reactions to the birth. George, however, adopted a cool and casual air as he made the walk into the Lindo Wing, no doubt because as the oldest child who had already welcomed a younger sibling, he felt like a seasoned pro.

  • Flight Records Shed New Light on President Trump's Infamous 2013 Moscow Trip
    Politics
    Time

    Flight Records Shed New Light on President Trump's Infamous 2013 Moscow Trip

    President Donald Trump twice gave James Comey an alibi for why a salacious report about the 2013 Miss Universe pageant in Moscow couldn’t be true: He never even spent the night in Russia during that trip, Trump told the former FBI director, according to Comey’s memos about the conversations. Now, flight records obtained by Bloomberg provide to-the-minute details, from wheels down to departure. Combined with existing accounts and Trump’s own social-media posts, they capture a mere 45 hours and 43 minutes that, nearly five years later, loom large in the controversy engulfing the White House and at the heart of the Comey memos, which the Justice Department turned over last week to Congress.

  • Bank of America Corp Isn’t Ready for Upcoming Challenges
    Finance
    InvestorPlace

    Bank of America Corp Isn’t Ready for Upcoming Challenges

    It took a few months after I wrote my piece, but Bank of America stock eventually rocketed past its doldrums. On a year-to-date basis, Bank of America stock is up 2%. About two weeks ago, Bank of America Vice Chairman Anne Finucane stated that “it’s not our intent to underwrite or finance military-style firearms.” BAC’s firearms-related clients include Vista Outdoor Inc (NYSE:VSTO), Remington, and Sturm Ruger & Company Inc (NYSE:RGR).

  • Ford Motor Company Earnings: Will Cost Cuts Help Boost Margins?
    Business
    Motley Fool

    Ford Motor Company Earnings: Will Cost Cuts Help Boost Margins?

    Ford Motor Company (NYSE: F) will present its first-quarter 2018 earnings results after the bell on Wednesday, April 25. Wall Street analysts polled by Thomson Reuters expect Ford to report earnings of $0.41 per share, on average, up from $0.39 per share in the first quarter of 2017. Back in January, CFO Bob Shanks said that while he expects Ford's full-year 2018 revenue to be about the same as 2017's, or a little higher, its adjusted earnings per share will likely fall to between $1.45 and $1.70 from $1.78 in 2017.

  • Why You're Smart to Buy This Beaten-Up Dividend Stock
    Business
    Motley Fool

    Why You're Smart to Buy This Beaten-Up Dividend Stock

    Oil and gas experts are closely watching the Permian Basin in 2018. The Permian Basin has grown crude oil production from 1.5 million barrels per day (bpd) entering 2014 to over 3.1 mbp today -- and that doesn't include natural gas (it's the second-largest gas play in the country) or other petroleum liquids. Current growth trends and expansion projects predict that crude oil output will rise to over 5 mpd sometime in 2023.