Pound Slips After Weaker Inflation Adds to Case for BOE Stimulus

© Reuters.  Pound Slips After Weaker Inflation Adds to Case for BOE Stimulus © Reuters. Pound Slips After Weaker Inflation Adds to Case for BOE Stimulus

(Bloomberg) — The slid and gilts rallied after inflation data backed up Bank of England policy maker Michael Saunders’ call for urgent stimulus to boost the U.K. economy.

Sterling fell against all its peers and government bond yields dropped to the lowest in more than a month as the data fueled bets that the central bank will lower interest rates this year. Money markets are now fully pricing in a full 25-basis-point rate cut for June, compared to November a day ago, and see a 62% chance of a move this month.

Saunders’ view on the need for more accommodative policy comes just days after BOE Governor Mark Carney said Britain’s economic growth had slowed below potential and that the Monetary Policy Committee had discussed the merits of near-term stimulus.

“There is more room for easing expectations to rise should incoming data disappoint and that could keep short-term sterling downside risks intact,” said Manuel Oliveri, a currency strategist at Credit Agricole (PA:) AG.

The pound fell 0.2% to $ 1.2998 by 9:40 a.m. in London, and also slipped 0.2% to 85.65 pence per . Benchmark 10-year yields extended their drop to seven basis points at 0.66%.

U.K. annual inflation came in at 1.3% for December, versus expectations for 1.5%, data showed. If the U.K. postponed easing policy this could spur risks “of a low inflation trap,” Saunders said earlier on Wednesday.

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Forex – U.S. Dollar Flat Ahead of Inflation Data, Trade Deal Signing in Focus

© Reuters.  © Reuters.

Investing.com – The U.S. dollar was flat on Monday in Asia ahead of the release of the latest inflation data. The potential signing of the phase one trade deal later this week is also in focus.

The U.S. dollar index that tracks the greenback against a basket of other currencies last traded at 97.078 by 11:35 PM ET (03:35 GMT), unchanged from yesterday’s close.

The latest U.S. inflation figures, due on Tuesday, are expected to remain broadly in line with the 2% inflation target, while retail sales numbers from the holiday season will also be closely watched.

A number of Federal Reserve officials will also speak this week. Boston Fed President Eric Rosengren and Atlanta Fed head Raphael Bostic will both discuss the economic outlook in appearances on Monday. Kansas City Fed President Esther George is due to deliver remarks on Tuesday, while Patrick Harker of the Philadelphia Fed and Robert Kaplan of the Dallas Fed are both due to make appearances on Wednesday.

The pair dropped 0.2% to 1.3036. Figures on fourth-quarter growth, trade, industrial output, retail sales and inflation all due to be released this week. The data will be closely watched after Bank of England Governor Mark Carney last week promised a “relatively prompt response” if economic weakness persists.

On the Brexit front, the U.K. is due to leave the EU on Jan. 31. It is uncertain whether 11 months will be enough to reach a deal. EU chief Ursula von der Leyen has earlier warned that a comprehensive U.K.-EU trade deal is “impossible” by the 2020 deadline.

“We will go as far as we can, but the truth is that our partnership cannot and will not be the same as before and it cannot and will not be as close as before because with every choice comes a consequences with every decision comes a trade off,” she said earlier this month.

The pair and the pair both rose 0.2%.

The safe-haven yen retreated as Asian equities traded higher today. The pair slid 0.2% to 109.62.

The pair lost 0.2% to 6.9004. China’s GDP data is due later this week.

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Mexico Central Bank Prepared to Act If Inflation, Risks Stay Low

© Reuters.  Mexico Central Bank Prepared to Act If Inflation, Risks Stay Low © Reuters. Mexico Central Bank Prepared to Act If Inflation, Risks Stay Low

(Bloomberg) — Mexico’s central bank could take monetary policy action as soon as February if it sees that inflation as well as internal and external risks remain low, Governor Alejandro Diaz de Leon said in an interview.

“We have to monitor if conditions in the economy continue having this favorable trend in terms of inflation and lower external and internal risks, and if this occurs it allows us to take monetary policy actions,” he said. “But this is precisely what we’ll be monitoring from now until the next decision.”

The central bank has cut borrowing costs by a quarter point in each of its past four rate decisions to 7.25%, but still has one of the highest real rates in the world. That’s fueled division within the board about how quickly it should ease monetary policy without risking a rebound in inflation and peso volatility.

Inflation has slowed markedly, and even fell below target to 2.63% in early December. The peso has been the best performing major emerging market currency this year, gaining further after the U.S. House of Representatives voted for an updated North American free trade agreement with Mexico and Canada.

Capital Flows

Diaz de Leon, who has voted with the majority for a cautious easing cycle, signaled that Mexico’s monetary policy may be better positioned to mitigate fluctuations in investor flows than to boost an economy that has low lending rates.

“Monetary policy channels are different for different economies,” Diaz de Leon said in what he described as his last interview of 2019. “In Mexico, probably due to its low penetration in financing as a percentage of GDP, it has a credit channel and sensitivity to interest rates different than other economies.”

And yet “we’re an economy very open to capital flows,” he added.

He said, however, that the central bank isn’t “pre-announcing” future policy actions and will make its decision based on data available at the time of its meetings.

Dissenting Votes

Diaz de Leon said that Mexico’s minimum wage hike of 20% for 2020 is expected to have a moderate impact on inflation. He wouldn’t respond to recent comments from fellow board member Gerardo Esquivel, who said on Twitter that those who criticize the wage hike seem to be using arguments from “Economy 101.”

Two out of five board members have repeatedly voted against the majority and for deeper half-point cuts amid concerns over an economy that dipped into a technical recession earlier this year.

In contrast to the prior three decisions, only one member voted for a deeper half-point cut in the December 19 meeting. All five members voted, said Diaz de Leon, after speculation arose that either Esquivel or Jonathan Heath, the two who had sought deeper cuts in previous meetings, had been absent.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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Tokyo inflation remains stagnant after Japan’s October sales tax hike

By Yoshiyasu Shida and Leika Kihara

TOKYO (Reuters) – Core consumer prices in Tokyo, a leading indicator of nationwide inflation, rose 0.5% in October from a year earlier, data showed on Tuesday, staying distant from the Bank of Japan’s elusive 2% target and keeping it under pressure to ramp up stimulus.

The data offered the first clue on how a sales tax hike that kicked off in October could affect price growth, which remains subdued despite years of heavy money printing by the Bank of Japan.

The rise in the core consumer price index (CPI) in the Japanese capital, which includes oil products but excludes fresh food prices, was slower than a median market estimate for a 0.7 percent gain.

Japan’s government proceeded with a twice-delayed increase in the sales tax rate to 10% from 8% in October as part of efforts to rein in the country’s huge public debt.

In forecasts made in July, the BOJ expects nationwide core consumer inflation to hit 1.0% in the current fiscal year ending in March 2020, including the effect of the higher tax.

The central bank is likely to trim the inflation forecast at a rate review on Thursday. But it is leaning toward keeping monetary policy steady as stable markets, a truce in U.S.-China trade talks and robust domestic demand give it room to save its dwindling ammunition, sources have told Reuters.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Dollar gains before manufacturing data, euro crumbles on German inflation

By Stanley White

TOKYO (Reuters) – The U.S. dollar traded near its highest in almost two weeks versus the yen before the release of data that is forecast to show the U.S. manufacturing sector returned to growth, which would ease concern about the impact of the ongoing Sino-U.S. trade war.

The euro teetered near its lowest in more than two years versus the greenback as weak economic data from Germany reinforced expectations that monetary policy in the euro zone will remain accommodative for an extended period.

The Australian dollar edged lower before an expected interest rate cut from the Reserve Bank of Australia (RBA) later on Tuesday.

A host of economic data and comments from central bankers this week will set the tone for major currencies as traders try to determine how far policymakers go to bolster growth.

“Economic data can be supportive of the dollar, and the Federal Reserve’s comments are not as dovish as some people think,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.

“An RBA rate cut and the risk of a stagnant European economy both should be positive for the greenback.”

The dollar traded at 107.85 yen early in Asia, close to its strongest level in almost two weeks.

The yen remained weak after the Bank of Japan’s tankan showed business confidence in the third quarter slid to its lowest in six years.

Trading could be subdued in Asian time because China’s financial markets are closed until Monday for public holidays.

The () against a basket of six major currencies rose 0.03% to 99.402, approaching the highest in more than two years.

The Institute for Supply Management’s measure of U.S. manufacturing activity due later on Tuesday is forecast to show a return to expansion in September, but just barely.

In August U.S. manufacturing activity contracted for the first time in three years due to the U.S.-China trade war.

Several Fed policymakers are scheduled to speak this week, but traders said they will focus most on comments from Fed Chairman Jerome Powell on Friday for hints about the direction of U.S. monetary policy.

The Fed has cut interest rates twice this year, but there are signs that the Fed is reluctant to ease policy further because the jobs market remains strong.

The euro stood at $ 1.0900 () in Asia, nursing a 0.4% decline in the previous session when it slid to $ 1.0885, which is the lowest since May 12, 2017.

Annual inflation in Germany, Europe’s largest economy, slowed to the lowest in almost three years, data on Monday showed.

The European Central Bank unleashed a new round of monetary easing measures on Sept. 12, but there is growing concern that the central bank is reaching the limits of what it can achieve and the burden will fall to eurozone governments to boost fiscal spending.

The Australian dollar fetched $ 0.6751 , down 0.02% in early trade.

Australia’s central bank is all but certain to cut its cash rate to a record low of 0.75% on Tuesday and will likely ease again in early 2020 to boost inflation and support a stuttering economy, a Reuters poll showed.

The New Zealand dollar traded at $ 0.6264 , which is within striking distance of a four-year low. The has taken a hit as weakening business confidence bolstered expectations for monetary easing.

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Thailand sees small impact on inflation after Saudi attacks

© Reuters.  Thailand sees small impact on inflation after Saudi attacks © Reuters. Thailand sees small impact on inflation after Saudi attacks

BANGKOK (Reuters) – Thailand expects little impact from surging oil prices on its inflation rate and exports following attacks on Saudi oil facilities, a commerce ministry official said on Monday.

Saturday’s drone assaults on Saudi oil facilities shut 5% of global crude output and caused the biggest surge in oil prices since 1991 after U.S. officials blamed Iran and President Donald Trump said Washington was “locked and loaded” to retaliate.

But the situation is not expected to drag on and should lift Thailand’s inflation by just 0.01 percentage point, official Pimchanok Vonkorporn said in a statement.

The ministry is maintaining its 2019 headline inflation forecast of 0.7%-1.3%, she said, adding that the impact of oil prices on inflation is less than that of a strong baht , Asia’s best performing currency this year.

The strengthening baht, which has gained 6.7% against the dollar so far this year, might keep inflation less than 1% this year, Pimchanok said.

In January-August, headline inflation was 0.87%.

Oil-related exports may improve only slightly and the ministry is sticking to the government’s annual export growth target of 3% in the second half of 2019, Pimchanok said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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U.S. core inflation firming, but Fed still seen cutting rates

2/2 © Reuters. FILE PHOTO: Workers at the Kraft Heinz booth count money at the shareholder shopping day in Omaha © Reuters. FILE PHOTO: Workers at the Kraft Heinz booth count money at the shareholder shopping day in Omaha 2/2

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. underlying consumer prices increased solidly in August, leading to the largest annual gain in a year, but rising inflation is unlikely to deter the Federal Reserve from cutting interest rates again next week to support a slowing economy.

Other data on Thursday showed the number of Americans filing applications for unemployment benefits dropped to a five-month low last week suggesting the labor market remains healthy, which should continue to underpin consumer spending even as hiring has cooled. The longest economic expansion on record is under threat from the White House’s year-long trade war with China.

Fed Chair Jerome Powell said last week he was not forecasting or expecting a recession, but reiterated the U.S. central bank would continue to act “as appropriate” to keep the expansion now in its 11th year on track. But the firming inflation trend, if sustained, could constrain the Fed’s ability to ease monetary policy further.

“Concerns about too-low inflation appear misguided,” said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “The Fed will still cut rates next week to provide added insurance in the event that the trade war escalates, but it might think twice about moving again in October if core inflation shows any further spark.”

The Labor Department said its consumer price index excluding the volatile food and energy components gained 0.3% for a third straight month. The so-called core CPI was boosted by a surge in healthcare costs and increases in prices for airline tickets, recreation and used cars and trucks.

In the 12 months through August, the core CPI increased 2.4%, the most since July 2018, after climbing 2.2% in July.

Economists polled by Reuters had forecast the core CPI rising 0.2% in August and up 2.3% on a year-on-year basis.

But a decline in energy prices held back the increase in the overall CPI to 0.1% last month. The CPI gained 0.3% in July. In the 12 months through August, the CPI increased 1.7%, slowing from July’s 1.8% advance.

The Fed, which has a 2% inflation target, tracks the core personal consumption expenditures (PCE) price index for monetary policy. The core PCE price index rose 1.6% on a year-on-year basis in July and has fallen short of the central bank’s target this year.

Economists expect inflation will accelerate in the coming months and breach the Fed’s target in 2020 following the broadening this month of U.S. tariffs on Chinese goods to include a range of consumer goods. Still, the Fed is likely to continue cutting interest rates this year to offset the drag on the economy from the trade war.

Financial markets have fully priced in a rate cut at the Fed’s Sept. 17-18 policy meeting. Most economists expect additional monetary policy easing in October and December.

The Fed cut rates in July for the first time since 2008.

The trade stand-off has soured business confidence and tipped both U.S. and global manufacturing into recession.

TRADE CONCESSIONS

Treasury Secretary Steven Mnuchin said on Thursday President Donald Trump was prepared to keep or even raise tariffs on Chinese imports amid ongoing trade talks. Mnuchin’s comments came despite Washington and Beijing granting concessions ahead of the next round of negotiations.

The dollar fell against a basket of currencies after the European Central Bank launched new stimulus but failed to live up to some dovish financial market expectations. U.S. Treasury prices fell, while stocks on Wall Street were trading higher.

Despite the economy’s waning fortunes, underscored by an inversion of the U.S. Treasury yield curve, employers are holding onto their workers.

In another report on Thursday, the Labor Department said initial claims for state unemployment benefits declined 15,000 to a seasonally adjusted 204,000 for the week ended Sept. 7, the lowest level since April.

The drop in claims was the largest since May. Robust consumer spending, which is backed by the strong labor market, is driving the economy.

“The labor market strongly suggests the economy continues to expand,” said John Ryding, chief economist at RDQ Economics in New York.

In August, gasoline prices fell 3.5% after rebounding 2.5% in July. Food prices were unchanged for the third straight month. Owners’ equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, rose 0.2% in August for a second consecutive month.

Healthcare costs jumped 0.7% in August, the largest gain since August 2016, after rising 0.5% in July. They were driven by a 1.4% surge in the price of hospital services, which was also the biggest increase since August 2016.

The cost of health insurance rose by a record 1.9%. There was also a jump in the costs of nonprescription drugs, but prices for prescription medication fell 0.2%.

Apparel prices rose 0.2% after gaining 0.4% in the prior month. Used motor vehicles and trucks prices increased 1.1% in August, rising for a third straight month. Prices for new motor vehicles dipped 0.1%. Prices for recreation increased 0.5%, the most since December 2018.

The cost of household furnishings and operations fell after rising for two consecutive months.

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Fed officials face weak inflation, but split over what it means

© Reuters. FILE PHOTO: St. Louis Federal Reserve Bank President James Bullard speaks at a public lecture in Singapore © Reuters. FILE PHOTO: St. Louis Federal Reserve Bank President James Bullard speaks at a public lecture in Singapore

By Howard Schneider and Ann Saphir

WASHINGTON/SAN FRANCISCO (Reuters) – U.S. Federal Reserve officials were divided Friday over how seriously to treat a slide in inflation, with one top policymaker saying the Fed was “close” to its inflation target and three others warning the weak price increases posed major risks the Fed may need to attack with lower interest rates.

Just how deep that division is and where in the debate the most influential policymakers have staked their ground is going to grip the financial world between now and the conclusion of the Fed’s next meeting on July 31. Interest rate futures markets currently see a 100% probability of a rate cut then, with the only debate in trading circles over whether the cut will 25 basis points or twice that.

Policymakers’ rate projections issued on Wednesday showed a near clean break at the Fed. Roughly half of officials see no rate reduction as likely appropriate this year, and roughly half see a cut of up to half a percentage point as probably warranted — a split that may turn on how quickly officials feel they should act.

The division took shape Friday, in the first hours after the lifting of the central bank’s formal “blackout” for commenting on the results of the last two-day policy session, which concluded Wednesday with the Fed leaving rates on hold in a range between 2.25 and 2.5 percent.

“The economy’s baseline outlook is good — sustained growth, a strong labor market and inflation near our objective,” Fed vice chairman Richard Clarida said on Friday in an interview with Bloomberg Television.

Clarida said there was “broad agreement” that the case for rate cuts had grown stronger in recent weeks. He also said the Fed was ready to act “as appropriate,” a phrase emphasized by Chairman Jerome Powell earlier this month as markets slid over broad global growth and trade concerns.

But Clarida’s description of the current 1.5 percent inflation rate expected this year as “close” to the Fed’s 2 percent target suggested less compulsion to move soon.

Powell, asked after this week’s policy meeting about the danger of delaying any policy move, said “I don’t think the risk of waiting too long is prominent right now.”

Others seemed to disagree.

“Recent indicators of inflation and inflation expectations have been disappointing,” Fed Governor Lael Brainard said on Friday in prepared remarks to a Fed conference in Ohio. With rates so low by historic standards, “basic principles of risk management…would argue for softening the expected path of policy when risks shift to the downside.”

Other problems have cropped up for the Fed, most notably the unpredictable path of U.S. trade negotiations, and signs that global economic growth may be slowing. U.S. economic data has also been choppy, with a weak recent jobs report and signs the manufacturing sector is slowing.

But the shortfall of inflation from the Fed’s 2 percent target has become a persistent problem for the Fed, putting its credibility and the performance of the economy at stake.

While the Fed’s mandates from Congress refers to maintaining “stable prices,” central bankers globally feel that a bit of inflation is healthy. It allows wages and prices to rise steadily, encouraging businesses and households to spend and invest. For the central bank it provides room for them to keep interest rates above zero and, therefore, be able to react to a downturn with interest rates cuts alone.

The threat of inflation drifting downward is twofold.

Waiting too long means more aggressive Fed action could be required. In an era when the benchmark policy rate is already so low, that could mean again hitting the zero lower bound and forcing the politically difficult decision to ramp up “unconventional” policy tools like bond-buying once again.

Brainard also sketched out the threat of a self-reinforcing spiral that could take hold if the Fed does not lift inflation higher, with weakened expectations dragging down actual inflation, and leaving the central bank perennially stuck near zero.

In a sharp broadside against the Fed’s decision last week to hold interest rates steady, Minneapolis Federal Reserve bank president Neel Kashkari said the economy needed shock therapy to push inflation and inflation expectations higher, and convince the public the Fed is serious about its 2 percent inflation goal.

It is a target that has not been consistently met since it was formally adopted in 2012, and Kashkari said he is concerned the public and investors have absorbed the wrong message.

Though he is currently not a voter on the Fed’s rate-setting panel, he called for the Fed to slash rates by half a percentage point now, and commit to not raising them until inflation durably moves to the central bank’s 2 percent target.

The Fed “should take strong action to re-anchor inflation expectations at our 2 percent target and support strong job growth, higher wage growth, and sustained economic expansion,” said Kashkari, who has consistently opposed recent rate hikes.

St. Louis Federal Reserve bank president James Bullard, meanwhile, a current voter on rate policy, explained his dissent at the recent meeting as largely a response to the weakening pace of price increases.

“Inflation measures have declined substantially since the end of last year and are presently running some 40 to 50 basis points below the FOMC’s 2% inflation target,” Bullard said in a prepared statement. “The forces that are keeping inflation below target seem unlikely to be solely transitory…Lowering the target range for the federal funds rate at this time would provide insurance against further declines.”

Graphic: The Fed’s inflation problem, click https://tmsnrt.rs/2Rv6Aij (The story corrects to change reference in sixth paragraph to rate cuts instead of rate increases)

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Forex – U.S. Dollar Flat as Inflation Supports Fed Rate Cut

© Reuters.  © Reuters.

Investing.com – The U.S. dollar pared back earlier gains after tame inflation data supported the case for the Federal Reserve to cut interest rates.

The , which measures the greenback’s strength against a basket of six major currencies, was up 0.05% to 96.690 by 10:15 AM ET (14:15 GMT), after reaching an earlier high of 96.757.

edged up 0.1% in May and was up 1.8% on the year, slipping from the Federal Reserve’s 2% target.

Traders have been speculating on the possibility of the central bank cutting rates due to slowing inflation and rising trade tensions after Fed Chairman Jerome Powell signaled the bank would “act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective.”

The Fed is expected to keep rates unchanged at its meeting on June 19, with an 83.2% chance of a cut priced in for its July meeting, according to Investing.com’s .

The dollar was lower against the safe-haven Japanese yen, with falling 0.1% to 108.40 as trade tensions lingered. President Donald Trump said he had no intention of a trade deal with Beijing absent concessions on five major, but unspecified, points.The comments appear to reduce the chance of a deal if the two leaders meet at the G20 summit on June 28-29.

Elsewhere, the euro inched down, with falling 0.1% to 1.1315. Sterling was higher, with gaining 0.1% to 1.2734, while rose 0.04% to 1.3282.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Market gauge of long-term euro area inflation expectations continue to hit fresh record lows

The ECB’s worst fear is starting to be realised

EUR 5Y inflation swap forward
ForexLive

The key gauge of long-term Eurozone inflation expectations has fallen to a fresh record low of just 1.19% and has been on a downwards spiral since breaking the 2016 low since the ECB meeting and Draghi last week.

On Monday, Bloomberg reported that the ECB is beginning to get a little worried about the prospects of inflation expectations deanchoring. Right now, we could be at the tip of where it all breaks down for the ECB.

The peculiar thing about the recent sharp fall in inflation expectations over the past week is how the euro has been resilient. While that may owe to positioning and flows moving out of the dollar, it’s hard to see the single currency hang on for too long especially if a further fall risks forcing the ECB to introduce stimulus measures sooner rather than later in order to restore confidence back in markets.

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