ECB: Lane: ECB Can Afford To Look Through Small Deviations From Target
Q: Once price stability has been restored, can Central Banks afford to look-through deviations from the target in either direction?
A: Lane: “Our 2% target is not a continuous target, it’s a medium-term target. That means we can look through short-term fluctuations”.
- The monetary policy reaction will depend on the size, persistence and origin of the deviation from target.
- “There is some value in having a stable interest rate policy all else equal”.
- If there is a deviation, we then need to assess second round effects and decide whether to respond or ignore. Lane stresses again that the 2% target is symmetric.
- In a previous response, Lane notes that he thinks the Eurozone is “quite far away” from a recession, based on current data.
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EURIBOR: EURIBOR FIX - 18/11/24
EURIBOR FIX - EMMI/Bloomberg
- EUR001W 3.1730 0.0010
- EUR001M 3.0430 -0.0190
- EUR003M 3.0040 0.0060
- EUR006M 2.7350 -0.0130
- EUR012M 2.4320 -0.0430
BONDS: Schatz and Euribor are extending losses
- BTP is sold in 2k, after Schatz and the short end Euribor are still leading futures lower, ERM5 is sold in over 5k.
- Next immediate support in the Schatz is at 106.69, while further downside momentum will open back to 106.625.
COMMODITIES: Bearish Theme in WTI Futures Remains Intact, Attention on $65.99
A bearish theme in WTI futures remains intact and the move lower from the Nov 7 high has reinforced current conditions. Attention is on $65.99, the Oct 1 low, and $64.16, the Sep 10 low and key support. For bulls, a clear reversal to the upside would instead refocus attention on the key short-term resistance at $77.70, the Oct 8 high. Clearance of this level would resume the recent uptrend. Initial firm resistance is $72.88, the Nov 7 high. The long-term trend condition in Gold is unchanged, it remains bullish and the latest pullback is considered corrective. The recent move down has resulted in a breach of the 20- and 50-day EMAs, and the metal is trading at its recent lows. The breach of the EMAs signals scope for a deeper retracement and sights are on $2511.1 next, the Sep 18 low. Firm resistance is seen at $2657.6, the 20-day EMA.
- WTI Crude up $0.25 or +0.37% at $67.28
- Natural Gas up $0.08 or +2.9% at $2.904
- Gold spot up $32.45 or +1.27% at $2595.64
- Copper up $2.3 or +0.56% at $413.05
- Silver up $0.47 or +1.57% at $30.7465
- Platinum up $15.29 or +1.62% at $957.48
