Monday, October 6, 2003
ECB maintains status quo
With the eurozone economy beginning to show glimmers of recovery, the European Central Bank left their key interest rate at 2 percent Thursday. The Bank had lowered its policymaking interest rate by 50 basis points to an historically low 2.0 percent at its June 5th meeting. The ECB, which strictly adheres to an inflation targeting policy to guide them, has an inflation ceiling of 2 percent. Growth in the eurozone has been miserable, with Germany, Italy, France and the Netherlands all recording a negative GDP reading for the second quarter. The appreciation of the euro against the dollar is hurting exporters as their products become less competitive and profits shrink. But recent survey data have begun to show stirrings of a nascent recovery. Thursday's meeting was expected to be President Wim Duisenberg's next to last meeting as President of the ECB. The European Union's leaders are scheduled to meet in Brussels on October 16th to anoint Jean Claude Trichet as his successor. Mr. Trichet is expected to take over as President on November 1, 2003.
The third quarter is over, long live the fourth quarter! (at least for the first 3 days)
Investors gave the last quarter of 2003 a rollicking welcome. Infused with optimism, buyers lapped up stocks in all the markets followed here. All 13 indexes were up despite a decidedly wavering start to the trading week. Ten of the 13 indexes followed here had gains of 2.5 percent or better.
New month, new quarter - all rise!
