Nothing new on the interest rate front. As expected, the Governing Council of the European Central Bank confirmed the discount rate for the Eurozone at an all-time low of 0,50%. The decision was awaited by the markets, which have been partially recovering since yesterday's sharp declines. Immediately after the communication of the news on rates, Piazza Affari gained 0,6%, London 1,8%, Frankfurt 0,76% and Paris 1%. Now all attention is focused on the press conference of Mario Draghi, number one of the ECB, scheduled for 14 pm.
The Bank of England also kept the reference bank rate unchanged at 0,5%., as was the expectations of analysts. At the same time, the BoE confirmed the maximum size of the government bond purchase plan at 375 billion pounds to provide support to the national economy.
There were signs of possible stabilization in the currency union from business activity surveys in June, but indicators remain in the recessionary zone and unemployment continues to worsen. Meanwhile, inflation has shown a slight rise, to 1,6% on an annual basis, but remains well below the ECB's official targets. In this context, uncertainties have recently arisen regarding the stability of the Portuguese government following the resignation of the finance minister.
Last month Draghi reiterated that the economic recovery should start "later" this year. But it has also clearly cleared the field of any hypothesis of restrictive measures, born after the Federal Reserve announced the possible interruption of some key stimuli to the economy between the end of the year and the beginning of 2014. The line of the ECB "will remain accommodative for as long as that it will be necessary, and for the foreseeable future ”, assured Draghi.
Meanwhile, the latest monthly monitoring by the ECB itself showed a further drop in bank credit to the private sector. Draghi said that the Governing Council is looking with an open mind to all possible ways of intervening, but he also clarified that the ECB cannot go beyond certain limits.
