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Speaker 1: Global business news twenty four hours a day. If Bloomberg

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Speaker 1: this is a Bloomberg Business flash and I'm parring moscown.

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Speaker 1: They said. Date's brought to you by Interactive Brokers and

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Speaker 1: c m E Group US DOCK Index futures are higher.

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Speaker 1: They did a trim a rally as European Central Bank

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Speaker 1: President Mario Draggy said he doesn't anticipate more rate cuts,

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Speaker 1: though risk to the Euro Area growth outlook remained to

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Speaker 1: the downside. He we do check the markets every fifteen

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Speaker 1: minutes throughout the trading day. On Bloomberg at SNP even

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Speaker 1: the future is still up nine and a half points,

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Speaker 1: DOWI Mini futures up sixties seven and nas doctumni futures

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Speaker 1: up twenty six. The acts in Germany's up one per

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Speaker 1: set ten, your treasury down nine thirty seconds, the yield

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Speaker 1: one point nine zero per set, Nimax screwed oil down

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Speaker 1: to ten percent or nine cents to thirty eight twenty

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Speaker 1: A barrel Comax gold is up three town for sunder

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Speaker 1: three dollars seventy cents to twelve announced, and the euro

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Speaker 1: now at a dollar ten forty one, the yen one

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Speaker 1: thirteen point seven nine. That's a Bloomberg business flash, Tom

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Speaker 1: and Mike Karen Moscow, thank you very much. Well, here's

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Speaker 1: where we are. The European Central Bank today cutting all

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Speaker 1: three of its rates, the main refinance rate to zero,

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Speaker 1: the deposit rate to negative forty basis points. They increased

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Speaker 1: q E by twenty billion euros a month, and they

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Speaker 1: announced a new program of loans two banks, essentially letting

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Speaker 1: banks borrow money for free, or ECB may actually pay

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Speaker 1: them to take money to try to lend it out.

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Speaker 1: Since we've been gone, Mario Joggy has been taking more questions.

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Speaker 1: He says the ECB expects substantially easier financing conditions because

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Speaker 1: of this. There are very strong synergies, Draggy says, between

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Speaker 1: all parts of synergy package synergies, and interestingly, he says

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Speaker 1: that there was no, uh, no real argument against taking

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Speaker 1: the actions. He notes that uh the voting rotation had

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Speaker 1: no impact on the discussions. YenS Widman from the hawkish

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Speaker 1: Bundesbank was not a voter this time, but Raggy says

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Speaker 1: the overwhelming majority were in favor of the decisions. Today's outcome,

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Speaker 1: he says, discout doubts about their willingness to act. It

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Speaker 1: has been a most interesting day. Nice summary, Michael, Olivia

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Speaker 1: Blanchard with US and now Yacom Fells of Pimco, Yacom Fells.

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Speaker 1: When you look at this historical moment, I go back

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Speaker 1: to Olivia Blanchard and the courage he had to say

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Speaker 1: we must reflate and reflate now four percent was the

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Speaker 1: operative number. We are miles from that. Is there still

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Speaker 1: an appropriate now or immediate future to reflating? Can Mario

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Speaker 1: Draggy affect what Olivia Blanchard tried to suggest four and

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Speaker 1: five years ago. Well, at least he's trying his best. Um.

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Speaker 1: I think, you know the power of monetary policy to

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Speaker 1: reflate is obviously limited. They're all kinds of headwinds, falling

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Speaker 1: inflation expectations, a very difficult global environment. Uh. And I

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Speaker 1: think what we need eventually is support from fiscal policy.

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Speaker 1: So I think Mario drug is doing the best he

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Speaker 1: can and he made a big step today. But in

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Speaker 1: the end, if you really want to see successful reflation

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Speaker 1: over the next few years, we need more support from

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Speaker 1: governments from fiscal policy. There are some encouraging signs on

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Speaker 1: that front. Uh fiscal policy for the first time in

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Speaker 1: many years, is now becoming supportive in the US, in

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Speaker 1: Japan and also in Europe. But I think more should

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Speaker 1: be done. Well, all central bankers seem to feel that way,

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Speaker 1: but we're not getting there. So I wonder Mario said

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Speaker 1: today they can go lower if they need to, but

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Speaker 1: how much lower can they go? In other words, has

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Speaker 1: he's throwing the kitchen sink at it? Does he have

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Speaker 1: my more left? Well? I think central bankers are slightly

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Speaker 1: moving away from the idea that they will push interest

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Speaker 1: rates ever more negative. I think the reaction the negative,

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Speaker 1: the adverse reaction of bank stocks at equity markets and

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Speaker 1: markets more broadly to the Bank of japan announcement of

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Speaker 1: negative interest rates, I think it has led to some rethinking.

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Speaker 1: So the focus, and we see this in today's decision.

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Speaker 1: The focus is now again much more on credit easing,

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Speaker 1: supporting the banks and also importantly venturing into buying private

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Speaker 1: sector assets. So this was a big step from the

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Speaker 1: ECB today announcing that they buy corporate bonds. Are they

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Speaker 1: going to compete with Pimco, with Scott Mather's corporate desk

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Speaker 1: to buy corporate paper in Europe? When you want to

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Speaker 1: buy a Siemens piece, Are you going to compete with Frankfurt? Well,

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Speaker 1: I think they will compete with private investor does yes.

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Speaker 1: My expectation would be that they won't buy huge amounts.

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Speaker 1: I think this is not so much about quantity. It's

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Speaker 1: more about sending a signal that they are willing to

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Speaker 1: buy private sector assets. And I just view it as

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Speaker 1: a first step if needed eventually, if if more is needed,

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Speaker 1: I think eventually the e CP could even venture into

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Speaker 1: buying equities, and so I just view this announcement of

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Speaker 1: buying corporate bonds as one step in that direction. You

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Speaker 1: can do much bigger quantities on equities than you can

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Speaker 1: do on corporate bonds. Uh. The question raised about that though,

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Speaker 1: and tomorrow Dargues says there will be a committee that

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Speaker 1: will decide which corporate bonds to buy. More details will

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Speaker 1: be announced later this afternoon in Frankfort. But is there

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Speaker 1: a risk that credit allocation becomes the e c B

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Speaker 1: s JAB. Yeah, I think you can put it this way.

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Speaker 1: I wouldn't. I wouldn't say it's a risk. I think

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Speaker 1: if you go back in history and the old days,

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Speaker 1: in the really old days, central banks were lending to

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Speaker 1: the private sector, they were discounting trade bills. Um. So

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Speaker 1: this is just going back to the roots where the

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Speaker 1: central banks also lent to the private sector. And part

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Speaker 1: of the reason for this is that the banks, for

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Speaker 1: various reasons, are not really doing it. What will this

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Speaker 1: do to the currency? And I know it's called the

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Speaker 1: litmus paper of the system. Does this reaffirm not the

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Speaker 1: drama of a currency war. Does it reaffirm stronger dollar,

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Speaker 1: weaker everything else? I'm not so sure about this. I

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Speaker 1: think we have opened a new chapter. So this is

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Speaker 1: not so much. Today's move was not so much about

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Speaker 1: pushing the currency lower, and I think the FX market

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Speaker 1: got the message. We had to reverse it initially the

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Speaker 1: euro weekend, but now it is stronger on the day,

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Speaker 1: and I think this is because the market understands that

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Speaker 1: the ECBs focus is now on addit easy, it is

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Speaker 1: on supporting the banks, it's on supporting the corporate sector,

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Speaker 1: the private sector, and so you could argue that this

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Speaker 1: is actually euro supportive. So so in a way, I

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Speaker 1: think we're now in a new environment where it's no

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Speaker 1: longer about currency wars. This is much more about focusing

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Speaker 1: on easing domestic monetary conditions. Com Pels from PIMCO, thank

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Speaker 1: you for joining us today, on this day when the

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Speaker 1: ECB has it's in the words of it. I didn't

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Speaker 1: say this words of many people throwing the kitchen sink

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Speaker 1: at the economy in Europetown. Is this fun? Oliva and Chard,

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Speaker 1: Brendan brown Yakham Fells. That's pretty good. Stay with U

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Speaker 1: Sporus surveillance. We're kind of it. Down to the opening bell,

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