Negative interest rates for the Eurozone?
There were more reports coming out on Monday that the ECB would consider introducing negative deposit rates at the upcoming monetary policy meeting. However, this is not definitely going to happen. Yet again, a member of the ECB, this time, the Governor of the Bank of Italy, intimated that the ECB would act if necessary to aid the economic recovery but hadnt ruled out conventional measures. He also, downplayed the issue of deflationary pressures in the Eurozone. In Germany, GDP increased 0.4% in Q4, following a 0.3% rise registered the previous quarter, according to data released today by Destatis. Analysts expected 0.4% growth.
In the US, default risk has fallen to about half of what it was four months ago, trading near Germany’s level as the American economy outperforms that of the European nation.
In the UK, all is a bit quiet ahead of tomorrow’s data release which is expected to show UK mortgage approvals rose to the most in more than six years in January.
Sterling was little changed against the euro before a report tomorrow that analysts said will show Britain’s economyexpanded in the fourth quarter. Loans for home purchases climbed to 47,150 last month, the most since September 2007.