This week, European Central Bank President Christine Lagarge has been traveling around Europe, speaking at Frankfurt, Paris, and Brussels on the regulator’s future plans. The ECB’s monetary policy is already among the softest in the world, with rates that cannot go much lower.
However, recent fundamental reports, as well as data on GDP growth and inflation rates show that the eurozone is not growing at the desired rates. Despite that, Lagarde said that the ECB cannot do much more to support growth. The ECB President is likely to spend more time encouraging the richer nations in the eurozone (Germany, the Netherlands) to fund their own stimulus with budgetary surpluses instead. The euro remains relatively weak right now.
In other news, OPEC+ members discussed increasing their oil production cuts. This most recent adjustment is necessary to stabilize the market amid the surprising drop in demand caused by the coronavirus epidemic in China. Public transport within China is closed, and most airlines have canceled flights to and from the country, causing a sharp drop in the demand for oil and sending oil prices near $50 per barrel.
Despite the announcement of more cuts in OPEC’s oil production activities, oil was slow to react and only rose to $51.88 and $55.38 per barrel of WTI/Brent crude, respectively.
Meanwhile, a glimmer of hope came from China, as the country announced that it will cancel tariffs on $75 billion worth of US goods. The move goes beyond the agreement signed between the US and China earlier this month and is a sign that the world’s two largest economies are determined to continue working together to end their trade dispute.
