ECB to Consider Expansion to QE | WTI Gains Recede Due to Increasing Geopolitical Tensions
Published June 18, 2019
European Central Bank President Draghi offered the strongest indication yet that the central bank will unveil another round of stimulus if weak growth and political uncertainty continue. Draghi made the address at the ECB’s annual symposium in Portugal and went on to state that there is “considerable headroom” to launch a fresh expansion of the €2.6tn quantitative easing program.
West Texas Intermediate prices have receded from last week’s gains, based largely on the oil tanker attack in the Gulf of Oman. The primary driver is mounting global recessionary fears overshadowing geopolitical friction and the risk of supply outages in the Middle East. This comes as tensions between the US and Iran continue to intensify with Iran stating that it would step up enrichment of uranium and may breach the limits laid out in the 2015 nuclear deal.
The ZEW Indicator of Economic Sentiment for Germany decreased abruptly in June and now stands at minus 21.1 points. This resembles a similar drop of 19.0 points in May with the indicator’s long-term average sitting at 22.0 points. The assessment of the economic situation in Germany has significantly worsened by 0.4 points as inflationary issues continue to haunt the domestic economy.
Canadian manufacturing sales declined by 0.6% to $57.8 billion in April, this following a 2.6% increase since March. The largest declines were noticed in transportation equipment and primary metal industries.