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ECB will run QE as long as necessary, Mersch says

Monday, Dec 28 2015
Luxembourg Central Bank Governor Mersch talking to International Bankers Forum said that ECB has by no means run out of ammunition. It still has firepower and deposit rate theoretically are not at lower bound. He uttered that QE will run as long as necessary to reach their goal sustainably and that ECB can add on at anytime should this be necessary.
 
On the other hand Fed's rate hike did not have major impact on the markets. Core PCE prices, the Fed's preferred gauge for inflation, have fallen below its targeted goal of 2% for every month over the last three years. Yellen expects long-term inflation to move toward the Fed's targeted objective, as temporary factors from a stronger dollar and dwindling oil prices fade. At last week's historic meeting, the FOMC projected that the upper-bound range for the Fed Funds Rate will increase a full percentage point to 1.5% by the end of 2016. The estimates imply that the FOMC could approve four modest rate hike throughout the course of next year.
 
Euro is currently being traded around 1.0980 area. Pair is likely to find support around 1.0950 handle and resistance above 1.10 level. There will be no data releases in the rest of the session.
More in this category: « Sterling slightly lower in a tighter range Monday trade Eurozone needs job growth »

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