INVESTICA LTD  ^{Understanding Markets}

Daily market newsletter: 27th June 2006   

Tough ECB talk

ECB officials have continued to take a tough stance on monetary policy over the past 24 hours. Belgian central bank governor Quaden stated that the ECB could increase rates again as early as the first week of August teleconference rather than at the regular council meeting later in the month.

European Central Bank governing council member Nicholas Garganas was quoted on Tuesday as saying that the bank was ready to increase rates aggressively to counter inflationary risks and also warned that the ECB would not necessarily stick with 0.25% rate increases. The Euro-zone money supply and lending data will be watched closely on Thursday and another strong set of data would reinforce ECB concerns over inflationary pressure.

Meanwhile, the German IFO index was also stronger than expected with a rise to 106.8 in June from 105.7 in May and the resilience in the face of higher interest rates and energy costs will boost confidence that the Euro-zone economy can cope with further monetary tightening.

There will be increased market speculation that Euro rates could be increased as early as July and there will also be speculation over a 0.5% increase which will offer background support to the Euro.

 

Strengthen your site with the best analysis. Upgrade to the full professional and independent daily currency analysis for just US$125 per week. Please contact  info@investica.co.uk for further information.

This analysis is available for reproduction in full or in part provided that recognition is given to Investica Ltd or there is a link back to www.investica.co.uk

Copyright is held by Investica Ltd

This daily newsletter is available by E-mail for free. Please forward it on to any interested friends or colleagues or post it on your website. If you would like to be put on the mailing list, please E-mail newsletter@investica.co.uk

Full details of our services are available at www.investica.co.uk E-mail  info@investica.co.uk

This E-mail contains free information which is available for distribution provided recognition is given to Investica Ltd.  If you would prefer not to receive future E-mails, please E-mail admin@investica.co.uk with 'unsubscribe' as the subject.

Disclaimer: Investica's market analysis is not investment advice and must not be taken as recommending particular market positions. Investica can take no responsibility for any actions taken by investors.

Inclusion of this comment in a Website does not indicate that the Website or company is endorsed or recommended by Investica Ltd.