INSTANT VIEW: ECB cuts rates by 50 bps to 3.25 percent
FRANKFURT (Reuters) - Following are comments from analysts after the European Central Bank cut interest rates by 50 bps to 3.25 percent.
ECB president Jean-Claude Trichet will explain the decision at a press conference starting at 8:30 a.m. EDT.
ANALYSTS' COMMENTS
ADAM COLE, GLOBAL HEAD OF CURRENCY STRATEGY AT RBC, LONDON
"One thing that markets like at the moment are decisive, pro-growth policies, which is what we got from the BoE and what we're not getting from the ECB, which is weighing on the euro."
STEPHEN LEWIS, CHIEF ECONOMIST, MONUMENT SECURITIES, LONDON
"You couldn't expect the ECB to move faster than they did, given their traditions and the size of their decision-making apparatus. They still think they have an inflation problem and the IG Metall trade union pay negotiations are on-going in Germany."
IAN STANNARD, BNP PARIBAS
"The market may be a little disappointed given the speculation building up over the past couple of days, but it will be the equity market reaction which determines the trend in currencies over the course of the next few days. So if we do see equity markets starting to recover I would suggest we'll see currencies correct a little bit further over the course of the coming days, we'll see the euro extending the recent recovery and also sterling, but it does depend very much on a positive equity market response to this latest round of rate cuts."
KARSTEN JUNIUS, DEKABANK
"The ECB shows that they did not panic and they are still taking decisive action, and in the press conference we will see that the ECB stands ready to do more if needed, and they will deliver more because we need more, but they don't do everything at once."
"Fifty basis points is quite a lot, usually we have seen 25 points up or down. They will do more, they don't have to be criticized because there are other measures that they have taken in the last few weeks. I think they are safe."
CARSTEN BRZESKI, ECONOMIST AT ING, LONDON
"Inflation has become a concern of the past and the ECB is now trying to stabilize the sharp economic downswing. We expect clear hints on further rate cuts in the months ahead (from the 1330 GMT press conference) as the ECB still has some work to do to get ahead of the curve."
