Industry TalkRegular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.
Uncertainty is dragging Eurozone sentiment down
European Central Bank (ECB) President, Mario Draghi, raised several rather telling key points in his press conference. This follows the first Governing Council meeting of 2019, where the ECB, as anticipated, left interest rates at current levels.
Key themes from Draghi’s talk:
- Incoming economic data is weaker than expected, based on external demand and both sector and country specific issues.
- Ongoing, drawn-out Brexit talks are posing a risk to the Eurozone economy.
- The continued uncertainty is dragging sentiment down.
- The combination of risk factors is affecting confidence.
- Rising wage growth is increasing inflationary pressure.
- Near-term growth momentum is weaker than expected.
- Considerable monetary stimulus is still required.
- The ECB is prepared to adjust instruments as appropriate and has a “full toolbox available”. They have not run out of instruments…
However, there were some positives to come out of his speech:
- The jobs market is moving in the right direction.
- They are confident that inflation will converge with the ECB’s goal.
Halo Financial’s Head of Corporate Dealing, Ricky Nelson, made the following comment:
“The Euro hit fell to a monthly low of 1.1305 during Mr Draghi’s press conference, but has subsequently rallied and is trading within the recent trading range. With the heightened downside risks to the economy the single currency remains a sell on any rally”.