Markets

Draghi’s Drama-Free Jackson Hole Message Reaffirms Slow QE Exit

Published

7 years ago

August 26, 2017

Draghi’s Drama-Free Jackson Hole Message Reaffirms Slow QE Exit

Mario Draghi’s message in Jackson Hole may not have been dramatic as three years ago but was clear nonetheless: the European Central Bank will go extremely slowly about removing its monetary stimulus.

While the ECB president startled investors in 2014 by laying the groundwork for quantitative easing, his published remarks at the Federal Reserve symposium in Wyoming on Friday included nothing on policy makers’ deliberations scheduled for Sept. 7 or on their concerns over the euro’s appreciation. In response to his silence, the single currency jumped to the highest level in more than two and a half years against the dollar.

But in the subsequent discussion Draghi took the opportunity to reiterate the Governing Council’s position at its previous policy meeting in July. A self-sustained convergence of inflation toward the ECB’s goal is still nowhere in sight, labor-market factors that are weighing on wage growth and subduing inflation won’t disappear anytime soon — meaning “a significant degree of monetary accommodation” is still warranted.

“His responses during the Q&A were more closely related to the outlook for the euro area, but stuck to the familiar narrative of weak inflation necessitating ongoing monetary accommodation,” economists Jamie Murray and Niraj Shah wrote in a Bloomberg Intelligence analysis. “As the ECB’s guidance indicates, asset purchases will continue until there is a pickup in underlying inflation — there’s little evidence of that now.”

Bond-Buying Talks

The euro held onto its gains after the comments from the Q&A. The single currency climbed as high as $1.1941, the strongest since January 2015, and was up 1.1 percent at $1.1924 at the close of trading.

Back in 2014 at the Kansas Fed mountain resort, Draghi made a last-minute addition to his speech to say euro-area inflation expectations were falling “at all horizons,” meeting a precondition that he had previously said would warrant QE.

More than 2 trillion euros ($2.4 trillion) of debt purchases later, policy makers are poised to discuss when and how the program will continue next year, and whether buying can be wound down. Given the complexity of ECB stimulus — which also includes negative rates and forward guidance — any decision may not come until the ECB’s October session.

Rather than front-running the debate, Draghi chose to focus his speech on a defense of free trade and post-crisis financial regulation — the latter comments echoing the remarks of Fed Chair Janet Yellen who spoke a few hours earlier. In the face of plans by President Donald Trump’s administration to dismantle rules accused of stifling U.S. growth, she urged that any rollback be “modest.”

“As always seemed likely, this is no 2014 repeat — we have to wait another fortnight for the Governing Council to hammer out an agreement on the next steps,” said Ken Wattret, an economist at TS Lombard in London. “No expression of concern about currency strength is a green light for the euro to move higher, irrespective of the agenda for the event.”

Up Next

U.S. Stocks, Treasuries Rise After Yellen’s Speech

Don't Miss

Samsung Chief Gets 5-Year Prison Term for Corruption

Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

Comments

Energy

How Nigeria’s National Power Grid Collapsed Ten Times Within 9 Months

Published

5 hours ago

November 5, 2024

Ugwoke Ogbodo

The national power grid has again collapsed, leaving many Nigerians in total darkness.

Investors King can authoritatively report that this is the tenth time the power grid will be disrupted this year alone.

For this recent collapse, the grid, reportedly lost power generation around 1:39 pm on Tuesday.

Information revealed that power generation was 2,711 megawatts as of 1:00 pm, having previously peaked at 3,631 MW.

Earlier, power generation peaked at 3,934.77 MW around six o’clock in the morning.

However, between 2 pm and 3 pm, hourly generation dropped to 0.00 MW.

The Transmission Company of Nigeria confirmed that the national grid experienced a partial disturbance at about 1:52 pm on Tuesday, 5th November 2024.

TCN spokesperson Ndidi Mbah mentioned that the recent collapse was due to a series of line and generator trippings that caused instability in the grid and, consequently, the partial disturbance of the system.

Mbah pointed out that data from the National Control Centre revealed that a part of the grid was not affected by the bulk power disruption.

TCN however indicated that work work is in progress to restore power.

She explained that engineers are already working to quickly restore bulk power supply to the states affected by the “partial disturbance.”

Mbah noted that presently, bulk power supply has been restored to Abuja at 2:49 pm, maintaining that “we are gradually restoring it to other parts of the country.”

She apologized to Nigerians for whatever inconvenience the collapse might have caused.

Findings by Investors King revealed that the grid had collapsed at ten different times between March and November, this year.

Times the grid collapsed included February 4, March 28, April 15, July 16, two times in August 5, October 14, October 15, twice in October 19 and now today, November 5.

Energy

Darkness Falls Again: TCN Explains Latest National Grid Collapse

Published

6 hours ago

November 5, 2024

Bassey Marshall

The Transmission Company of Nigeria (TCN) has provided an explanation for the latest National Grid collapse, which occurred on Tuesday, November 5.

Tuesday’s collapse, marking the 10th in 2024 alone, left Nigerians in total darkness.

Recall that the National Grid collapsed twice in October, sparking concerns among Nigerians.

Reacting to the latest collapse via a statement on Tuesday, the General Manager of TCN Public Affairs, Ndidi Mbah, disclosed that the collapse happened at 1:52 pm.

The GM revealed that the grid collapse was caused by line and generator trippings.

Mrs. Mbah said, “TCN states that the national grid experienced a partial disturbance at about 1:52 pm today, 5th November 2024.

“This followed a series of line and generator trippings that caused instability in the grid and, consequently, the partial disturbance of the system.

Data from the National Control Centre (NCC) revealed that a part of the grid was not affected by the bulk power disruption.

Mbah disclosed that operators are working to restore power in affected states, adding that power was restored in Abuja.

She explained, “TCN engineers are already working to quickly restore bulk power supply to the states affected by the partial disturbance. Presently, bulk power supply has been restored to Abuja at 2:49 pm, and we are gradually restoring power to other parts of the country.”

Apologizing to Nigerians, TCN said, “We sincerely apologize for any inconvenience this may cause our electricity customers.”

Investors King, in an earlier report, revealed that in an attempt to address the persistent collapse of the national grid, the Nigerian Electricity Regulatory Commission (NERC) announced that discussions were underway with Independent Operators to take over the management of the grid.

Energy

Nigeria Partners with ECOWAS and Morocco to Launch $26B African Gas Pipeline

Published

13 hours ago

November 5, 2024

Bassey Marshall

The Nigerian government, in partnership with the Economic Community of West African States (ECOWAS), Morocco, and Mauritania, has announced plans to advance the $26 billion African Atlantic Gas Pipeline project to drive economic growth across Africa.

This development was revealed on Monday, November 5, by Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), at the ECOWAS Inter-Ministerial Meeting on the Nigeria-Morocco Gas Pipeline Project.

Speaking at the meeting, which was attended by ECOWAS Ministers of Hydrocarbons and Energy as well as representatives from Morocco and Mauritania, Kyari stated that, once completed, the project will connect 13 African countries.

Represented by Olalekan Ogunleye, NNPC’s Executive Vice President for Gas Power & New Energy, Kyari said this will be Africa’s largest pipeline project.

Ogunleye confirmed that progress has been made with the front-end engineering design completed, the phase two study finalized, and work ongoing for environmental and social impact assessments as well as land acquisition and resettlement.

He emphasized NNPC’s readiness to execute the project: “Today, we come together to make significant progress in the African Atlantic gas pipeline project, which is a transformative initiative connecting at least 13 African nations in shared prosperity and development. These achievements underscore our capability to deliver this landmark project, supported by strong regional collaboration.”

Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), described the project as a game-changer for the regional economy, stating, “We stand at a critical juncture where these agreements can reshape our energy landscape, strengthen our economies, and uplift our people.”

He also highlighted that the project will increase Africa’s presence in the global gas market, noting that “the agreements demonstrate a strong commitment to advancing hydrocarbon and energy trade across ECOWAS, enhancing access to natural gas in West Africa, and expanding Africa’s global footprint in the gas market.”