{"id":2508,"date":"2007-12-07T10:38:30","date_gmt":"2007-12-07T10:38:30","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2508"},"modified":"2025-03-27T15:48:33","modified_gmt":"2025-03-27T15:48:33","slug":"hawkish-ecb-at-odds-with-incoming-data","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2508","title":{"rendered":"Hawkish ECB at odds with incoming data"},"content":{"rendered":"<p>The ECB expects &ldquo;sustained real GDP growth broadly in line with trend potential&rdquo;, according to the statement released after yesterday&rsquo;s policy meeting. They are either in denial or &ndash; more likely &ndash; talking tough because of near-term inflation concerns. <\/p>\n<p>Key leading indicators have deteriorated sharply in recent months. As an example, business expectations in the services sector purchasing managers&rsquo; survey has fallen to its lowest since November 2002. Historically, the ECB has been cutting rates when this series has been at current levels &ndash; see first chart. <\/p>\n<p>Spain looks increasingly at risk of a nasty recession. Residential investment accounts for over 7% of real GDP and housing construction approvals fell 51% in the third quarter from a year before &ndash; see chart. Monetary trends are also alarming, with inflation-adjusted narrow money now contracting on an annual basis (see also <a href=\"http:\/\/www.moneymovesmarkets.com\/journal\/2007\/10\/3\/spanish-landing-looking-harder.html\">here<\/a>). <\/p>\n<p>My ECB-ometer suggests a neutral policy stance is now warranted by incoming data. The hawkish rhetoric looks increasingly unconvincing.<\/p>\n<p><span class=\"full-image-float-none\"><img decoding=\"async\" style=\"width: 500px; height: 300px\" alt=\"EurolandRepoRate.jpg\" src=\"\/storage\/EurolandRepoRate.jpg\" \/><\/span><\/p>\n<p><span class=\"full-image-float-none\"><img decoding=\"async\" style=\"width: 500px; height: 300px\" alt=\"SpainNewHousingApprovals.jpg\" src=\"\/storage\/SpainNewHousingApprovals.jpg\" \/><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The ECB expects &ldquo;sustained real GDP growth broadly in line with trend potential&rdquo;, according to the statement released after yesterday&rsquo;s policy meeting. They are either in denial or &ndash; more likely &ndash; talking tough because of near-term inflation concerns. Key leading indicators have deteriorated sharply in recent months. As an example, business expectations in the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2508","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2508","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2508"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2508\/revisions"}],"predecessor-version":[{"id":4817,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2508\/revisions\/4817"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2508"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2508"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2508"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}