Overview of the previous week's most influential economic events

Note: This section contains information in English only.
Source: Dukascopy Bank SA
Investors all around the world were eyeing the ECB to find out whether the central bank would fall for calls to launch large-scale asset purchases, also known as quantitative easing, to defy mounting deflation threats and revive the flagging Euro zone economy. Instead, Mario Draghi, the ECB President, announced another rate cut, slashing its benchmark interest rates to 0.05% and the deposit rate to –0.2%. On top of that, the central bank announced a new stimulus programme, which will buy debt products from banks to make credit cheaper, boosting investment and growth at a time when the 18-nation economy has stalled. The scheme is somewhat different from the stimulus programme undertaken by the Fed, which includes large-scale purchases of government bonds. Nevertheless, during the press conference the ECB Chief Mario Draghi admitted that an option of launching QE was discusses during the board meeting, but the comfortable majority decided to opt out this time. Still, the announcement moved markets. The Euro weakened versus the U.S. Dollar, falling to $1.2995, the first time below the 1.30-mark since July 2013.
Meanwhile, all other major central banks including the Bank of Japan, Bank of England and Bank of Canada kept their monetary policy intact. The Bank of Japan kept its ultra-easy monetary policy unchanged and maintained its optimistic outlook of the economy despite a contraction in the second quarter that underlined the damage caused by an April sales tax hike, signalling confidence that it will be able to meet the 2% inflation target without additional stimulus measures. Moreover, BoJ Governor Haruhiko Kuroda called for the government to proceed with another sales tax lift to fix its finances.
Reserve Bank of Australia Governor Glenn Stevens also kept interest rates on hold to prevent fueling house price increase in an attempt to reduce unemployment faster, which jumped to a 12-year high in July, and warned about the creation of asset bubbles in the current low-interest rate environment. Nevertheless, Stevens believes that the non-mining economy is slowly gaining a stable footing.
The Bank of England's rate-setting body voted to keep its asset purchase target as well as interest rates untouched at the record low of 0.5%, despite increasing calls by some policy makers for a change in the policy.  Investors will have to wait almost two weeks to find out if any more policymakers voted in favour of raising interest rates, after two of the nine MPC members broke ranks in August.
This week's the most influential events are going to be Mark Carney's and Haruhiko Kuroda's speeches, as well as RBNZ monetary policy statement. On September 10 Inflation Report Hearings will take place, which might also drop subtle clues regarding future BoE's monetary policy.

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Actual Topics

Mon, 08 Sep 2014 06:17:07 GMT

No growth in Eurozone confirmed in Q2, whereas German industrial production jumps

The Euro zone economy remained stagnant in the second quarter, as pickup in consumer spending and exports were offset by drops in investment spending and inventories coupled with an unusual large decline in construction.

Fri, 05 Sep 2014 06:21:03 GMT

Australia's retail sales rise, while trade deficit narrows

Retail sales in Australia continued to rise for the second consecutive month in July, an optimistic sign of both consumption and economic growth in the third quarter.

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