Reuters - Video

Edition: US | UK | IN | CN | JP

video Finance Videos

Wall Street gets Fed reality check
Wall Street gets Fed reality check - 01:51
Reuters Today: Spanish yields seen rising at auction
Reuters Today: Spanish yields seen rising at auction - 06:21
Surprise services boost points to UK recovery
Surprise services boost points to UK recovery - 02:54
Breakingviews: Do as I say, not as I do – German wages
Breakingviews: Do as I say, not as I do – German wages - 05:04
Market Pulse: Spain under fire as investors shun bond sale
Market Pulse: Spain under fire as investors shun bond sale - 03:28
Myanmar's Kyat begins managed float
Myanmar's Kyat begins managed float - 01:59
ASEAN: territorial code of conduct draft by year-end
ASEAN: territorial code of conduct draft by year-end - 01:48
U.S. Morning Call: Stock futures down, JPMorgan to be fined
U.S. Morning Call: Stock futures down, JPMorgan to be fined - 02:08
EMEA Day Ahead:: Thursday
EMEA Day Ahead:: Thursday - 03:13
3XSQ: Customer funds in question; royal return
3XSQ: Customer funds in question; royal return - 05:44
Still cashing in? Hirst retrospective
Still cashing in? Hirst retrospective - 02:32
World's biggest car delivery center
World's biggest car delivery center - 02:41
FACTBOX: Titanic the movie sails again
FACTBOX: Titanic the movie sails again - 02:20
Trading at Noon: Wall St. down on lost hope for stimulus
Trading at Noon: Wall St. down on lost hope for stimulus - 02:48
Draghi holds rates, offers caution
Draghi holds rates, offers caution - 01:50
Breakingviews: Gun bubble redux
Breakingviews: Gun bubble redux - 02:51
Yahoo cuts 2,000 jobs
Yahoo cuts 2,000 jobs - 01:15
Easter egg panic in eastern Europe
Easter egg panic in eastern Europe - 01:28
Wealth Strategies: Equity rally has 3 years left in cycle
Wealth Strategies: Equity rally has 3 years left in cycle - 06:05
Congressional insider trading ban
Congressional insider trading ban - 01:17
Gas prices no detour for car buyers
Gas prices no detour for car buyers - 02:13
Demand for fuel-efficient cars will outlast spike in gas prices
Demand for fuel-efficient cars will outlast spike in gas prices - 02:36
Most engines of growth are in emerging markets : Nissan CEO
Most engines of growth are in emerging markets : Nissan CEO - 05:39
U.S. Day Ahead: GAP set to shine with same store sales
U.S. Day Ahead: GAP set to shine with same store sales - 01:59

EZ inflation has investors scratching heads

Friday, February 28, 2014 - 01:24

Feb. 28 - Euro zone inflation data comes out higher than expected - sending shares down, the euro up and opening a whole new guessing game about what the ECB might do at its policy meeting next week. David Pollard reports.

▲ Hide Transcript

▶ View Transcript

It was a case of a little going a long way. Euro zone inflation came in just 0.1 per cent ahead of expectations, at 0.8 per cent. That was enough to send the euro to its highest level this year. Shares - which had been buoyed by expectations of an ECB rate cut or liquidity injection next week - took a dive. Could the markets have over-reacted? Trevor Williams of Lloyds. SOUNDBITE, (English) Trevor Williams, Chief Economist, Lloyds Bank, saying: ''This is an unchanged number. It's not an improvement, I would argue, in the inflation rate, if improvement is it trending back towards the authorities' target rate of at or just under two per cent.'' ECB chief Mario Draghi has been under pressure to loosen monetary policy to boost a fragile recovery in the euro zone. And has been denying that deflation's a threat. The classic deflation telltale of households deferring purchases is not evident, he's claimed. The numbers may offer a reprieve for Draghi - but only for now. SOUNDBITE, (English) Trevor Williams, Chief Economist, Lloyds Bank, saying: ''Over the next few months, our monthly calculations suggest that the inflation rate could fall as low as half a per cent, in which case I don't think the pressure's gone away in the immediate future. It does appear to have gone away for now.'' Less likely next week perhaps, a rate cut can't be ruled out entirely. But with the ECB's main rate at a rock bottom quarter of a percent, those that do see a cut coming forecast rates to be shaved by as little as one twentieth of a per cent.

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

Close

EZ inflation has investors scratching heads

Friday, February 28, 2014 - 01:24