Daily Alert – Wednesday 17th March 2021: ECB says stimulus insufficient (problem)

Mark NugentDaily Alert, March 2021

Daily Alert – Wednesday 17th March 2021: ECB says stimulus insufficient (problem)

I have been talking about this for weeks. Now the ECB are opening talking about it. ECB Executive Board Member Isabel Schnabel has said that the recovery stimulus may prove too little. That is code for IS TOO LITTLE. And it is no surprise as the ECB’s efforts amount to a small fraction (<10% by some measures) of the equivalent US spend on a per capita basis. Problem is, as there is no fiscal union in the EU, spending more, a lot more, will be politically problematic as there is only so much the rich countries are prepared to transfer to the poor. This could seriously impact the EU covid recovery for years or even decades. Watch this space.

Markets are quiet ahead of tonight’s Fed, as they often are. Equities are flat, as is oil and GOLD. The EUR is down as per my bias. The JPY and commodity currencies are floating around aimlessly due to the absence of any significant positive or negative risk sentiment.

I have placed no trades so far this week.

Major risk events to come are the Fed tonight and the Bank of England’s Super Thursday tomorrow. The major one is probably the Fed, with the famed “dot plot” due, showing the current view of all voting Feb members on likely interest rate changes over the next 3 years. This can and often does move the USD.

I will be back on Friday.

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