The bond market has entered a financial twilight zone, and at this point, there doesn't seem to be a smooth way out.Market Insiderread more
"I think (rate cuts) will help, but whether they're going to be sufficient to counter the negative trade pressures and global growth slowdown and impact is debatable," one...Central Banksread more
China has used both monetary and fiscal measures to lift economic activity as its trade war with the U.S. looks set to intensify in the coming months.China Economyread more
Alibaba held a board meeting before its latest quarterly earnings release last week, during which the board decided to postpone the Hong Kong listing, Reuters reported.Technologyread more
President Donald Trump said on Twitter he was postponing a scheduled meeting with Denmark's prime minister because of her lack of interest in discussing a possible sale of...World Politicsread more
The two countries want to smash the civil aerospace duopoly enjoyed by Airbus and Boeing.Aerospace & Defenseread more
Federal Reserve Chairman Jerome Powell is set to deliver his annual speech on Friday at the Jackson Hole, Wyoming symposium, where he's expected to provide more clarity on the...Asia Marketsread more
After Elon Musk touts Tesla solar on Twitter, Walmart sues the electric vehicle and clean energy company over store rooftop panels that ignited.Technologyread more
U.S. and Asian investors poured $3.7 billion into U.K. tech start-ups in the first seven months of 2019, research shows.Technologyread more
Trump said he has "been thinking about payroll taxes for a long time" — and he cautioned that "whether or not we do something now, it's not being done because of recession."Politicsread more
Secretary of State Mike Pompeo privately told business executives and free traders that the trade war could end by the 2020 election and that hurdles to an immediate agreement...2020 Electionsread more
The euro zone's central bank slashed its growth forecast for 2019 to 1.1 percent from an earlier forecast of 1.7 percent made in December. ECB President Mario Draghi said Thursday that there had been a "sizable moderation in economic expansion that will extend into the current year."
"The persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets appears to be leaving marks on economic sentiment," Draghi told reporters.
The euro, which had already been falling after an earlier rate announcement, dropped again after Draghi's remarks. At 2:00 p.m. London time, the single currency was down 0.5 percent against the dollar, trading at $1.1245.
The 19-member region has been overshadowed by political developments in Italy, which entered a technical recession at the end of 2018; and in the U.K., where its departure from the EU has yet to be finalized. There are also concerns about a potential slowdown in the Chinese economy, given its reliance on exports to the country. Recent manufacturing data have also indicated weaker activity, especially in Germany — the traditional growth engine of the region.
"The impact of these factors is turning out to be somewhat longer-lasting, which suggests that the near-term growth outlook will be weaker than previously anticipated," Draghi also said Thursday.
Given the worsening economic conditions, the ECB also lowered its inflation forecasts for 2019. Annual inflation is set to hit 1.2 percent this year. The December forecasts had pointed to a headline inflation target of 1.6 percent. The central bank is positive that its new set of measures will help bring inflation closer to its target of "close but below 2 percent."
The ECB's interest rates remain at record lows and are set to remain at these levels at least until the end of the year. The central bank also announced a fresh set of loans to euro area banks on Thursday, aimed at boosting the real economy.
The euro zone's central bank, for those nations that share the single currency, ended its massive bond-buying program back in December but is now unveiling yet more stimulus in the face of weakening growth and external risks.
Karen Ward, a chief market strategist for EMEA at J.P. Morgan Asset Management, said that the ECB had now followed the U.S. Federal Reserve with a "significant pivot" in policy.
"Whilst such an announcement was expected at some point in the coming years the market is welcoming this proactivity. The euro exchange rate is down alongside European government bond yields," she said.
"This should help stabilize sentiment and activity in the euro zone. But for a meaningful turnaround in Europe we look further afield to what's happening in Beijing. In our view a notable rebound in activity in China is required to see a significant reacceleration in Europe over the course of the year."