WSJE: ECB WATCH: Rate Freeze Built On Faint Hopes
The European Central Bank left its main interest rate steady on Thursday and hinted strongly that - barring any surprises - further cuts aren't in the works for the world's second-largest economy.
Just last month, the ECB slashed rates by a half-point to 2% - the lowest for many euro nations since the end of World War II - and it left the door wide open for more cuts.
But Thursday, Wim Duisenberg, the ECB's president, said the bank's governing council deemed rates "appropriate" because they are "confident" that rates are suitable to get the euro zone out of its three-year slump without stoking inflation.
"I can make no forecasts of how long we will remain at that level," Duisenberg told reporters shortly after the bank's decision. "But I would expect it for a considerable time to come."
The decision was of little surprise after Duisenberg last week told politicians that the ECB had "done our part" for the economy and that it was now up to national governments to overhaul labor markets and usher in other reforms "which are so urgently required for Europe."
The ECB has cut its key rate by 1.25 percentage points in three separate moves since last December.
For Germany, Europe's largest economy but also one of its weakest, the rate is now at its lowest since 1876. Economists believe Germany runs the biggest deflation risk in all of Europe.
Euro Cheer
Despite the bank's recent steps, political pressure has been mounting for the bank to continue trimming. Economic data show the area's economy remains weak, with the industrial and service sectors still shrinking.
Economies elsewhere are also vulnerable. The Bank of England cut rates on Thursday, declaring that "the global economic recovery has remained hesitant." The U.S. Federal Reserve did so just a few weeks ago. "The economy...has yet to exhibit sustainable growth," the Fed said.
The ECB is, however, heartened that recent surveys show consumer and industrial confidence have stopped falling. Stock markets are also on the rise, and the ECB is hoping to get a boost from overseas as tax cuts in the U.S. filter through.
The euro is another source of hope. It appears to have stopped its rapid ascent against the dollar, which was hurting exporters as their products become relatively more expensive in foreign markets.
"I must confess we saw with some relief that the strong movement of appreciation which had been evident the month before seems at least for the time being to have been interrupted," Duisenberg said.
Data Thursday underscored the fragility of the euro-zone economy. Gross domestic product for the 12-nation bloc grew 0.1% in the first quarter of this year, compared with the last quarter of 2002, the E.U.'s statistics office said. That was an upward revision from an initial reading of zero growth.
The European Union Commission, its executive body, said that it continues to expect quarterly growth of between zero and 0.4% in the second and third quarters of this year.
End To Easing
But no matter what the ECB says, most economists continue to expect further rate cuts. CDC IXIS Capital Markets in Paris believes a quarter-point move in September is most likely as it becomes evident that the ECB's expectations for growth fall out of reach.
ING Financial Markets expects a half-point off by the end of September, and then another quarter - down to 1.25% - by the end of the year.
Economists are also fretting about the rise in recent weeks in long-term interest rates in bond markets which, they fear, will nip the recovery in the bud by driving mortgage rates higher and hindering corporate borrowing in Germany and France.
In order to prevent this, the ECB needs to cut rates and then "convince the markets" that they're going to remain low for a long time, says Luigi Buttiglione, chief strategist at hedge fund BlueCrest Capital.
The ECB did say that "downside risks" to its main scenario for a gradual pick-up in the economy do exist. But some economists said the tone of Duisenberg's comments suggest a rate cut is even further off in the future.
Julian Callow , economist at HSBC, doesn't expect a cut until November. Jose Luis Alzola, a euro area economist at Citigroup, believes it's growing less likely that rates are headed down much. He anticipates a cut of a quarter-point around October will put an end to the ECB's two-year easing campaign.
欧洲央行维持利率不变
欧洲央行(European Central Bank)周四决定维持主要利率不变，同时明显暗示，如果不发生意外，欧元区不打算进一步调降利率。
欧洲央行在上个月刚刚降息50个基点，将主要利率下调至2%，对于许多欧元区国家而言，这是第二次世界大战结束以来的最低水平。同时欧洲央行还为进一步降息打下了伏笔。
但欧洲央行行长德伊森贝赫(Wim Duisenberg)周四表示，欧洲央行管理委员会认为目前的利率水平已很合理，因为他们相信这一利率水平将可帮助欧元区经济在不引发通货膨胀的情况下走出过去3年的困境。
上述决定基本在市场人士的意料之中，因为德伊森贝赫上周曾向政界表示，欧洲央行已在经济方面尽了自己的努力，剩下要靠各国政府来改善就业状况和引进欧洲所急需的其他改革了。 自去年12月以来，欧洲央行已分三次将主要利率下调了1.25个百分点。
对于德国这一欧洲最大、而表现也最不尽人意的经济体而言，2%的利率水平是该国自1876年以来的最低。经济学家相信，在所有欧洲国家中，德国所面临的通货紧缩风险最大。
欧元拍手称快
尽管欧洲央行已连续三次降息，但要求它继续降息的政治压力依旧在不断加大。经济数据表明，欧元区经济的表现仍持续疲弱，工业和服务业仍处于紧缩之中。 而全球其他地区的经济也未见好转。英国央行(Bank of England)周四宣布降息的同时指出，全球经济复苏的前景仍不明朗。而美国联邦储备委员会(Federal Reserve)在数周前降息时也表示，目前经济尚未出现持续增长的势头。
不过，让欧洲央行感到振奋的是：最近的调查显示消费者和行业信心已止跌趋稳；全球股市也开始回升；另外随著美国减税计划的落实，欧洲的公司也将逐渐开始受益，并进而起到提振欧元区经济的作用。
欧元汇率目前的表现也为欧洲央行提供了另一份希望。欧元/美元前段时间迅速攀升，使欧元区出口到国际市场上的产品价格上扬，因此削弱了欧洲出口商的竞争力。但现在欧元/美元的涨势已经停步。
德伊森贝赫周四承认，上个月欧元兑美元汇率强劲上扬的走势现至少目前看已告一段落，这让欧洲央行稍微松了一口气。
不过周四公布的经济数据显示，欧元区经济依然脆弱。欧盟统计部门的数据显示，欧元区12国今年第一季度国内生产总值向上修正后，较2002年第四季度增长0.1%，而修正前则是零增长。
欧盟的执行机构欧盟委员会(European Union Commission) 预计，欧元区今年第二和第三季度的经济增幅仍将维持在0%-0.4%的低水平。
降息循环终止
然而无论欧洲央行如何表态，绝大多数经济学家仍预计央行会进一步降息。巴黎的CDC IXIS Capital Markets认为，由于欧洲央行的经济增长预期显然无法实现，央行选择在9月份再次降息25个基点的可能性还相当高。
ING Financial Markets则预计欧洲央行将在9月底前降息50个基点，并在年底前再降息25个基点，最终使主要利率降至1.25%的水平。
经济学家还为近几周债市中长期债券收益率攀高而忧心忡忡，他们担心这会推高抵押贷款利率，限制德国和法国的公司贷款需求，并最终扼杀尚处于萌芽状态的欧元区经济复苏。
对冲基金BlueCrest Capital的首席策略师Luigi Buttiglione表示，为了避免上述情况的出现，欧洲央行需要下调利率，并使市场相信，利率将在较长时期内保持在较低的水平。 欧洲央行的政策声明中的确指出，其所预见的经济逐渐好转前景的确存在"下行风险"。但一些经济学家表示，从德伊森贝赫周四讲话的语气来看，欧洲央行甚至可能在未来更长的一段时间里都不打算降息。
瑞士信贷第一波士顿(CSFB)的经济学家Julian Callow认为欧洲央行在11月之前不会降息。而花旗集团(Citigroup)欧元区经济学家Jose Luis Alzola则认为，进一步降息的可能性越来越小。 Alzola预计，欧洲央行或许在10月份前后再降息25个基点，为期两年的降息周期划上句号。
