Investors cling to stimulus hopes as recession fears swirl - business live
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Can policymakers save us from recession? That’s the question on the lips of investors this morning, as hopes of new stimulus packages build.
Stocks have jumped in Asia overnight, following solid gains in Europe and in New York on Monday. After last week’s rush to sell shares, traders are judiciously picking them up again, in anticipation of central bank stimulus.
The European Central Bank seems certain to loosen monetary policy in September -- imposing steeper negative rates on banks and perhaps kickstarting its QE bond-buying programme again.
The Federal Reserve may also ease next month, caving into pressure from Donald Trump to cut rates.
Yesterday the president demanded that the Fed slash a whole percentage point off rates “over a fairly short period of time”, which is certainly more radical than Wall Street, or the Fed itself, had in mind.
Trump also insists that America isn’t heading into recession -- but if he’s wrong, it’s clear that the White House will point the finger of blame towards the Fed, rather than its own belligerent trade policies.
Yesterday, the Bundesbank warned that Germany’s economy could be sliding into recession right now. With orders for cars and industrial equipment sliding, GDP could shrink this summer for the second quarter in a row.
The bank cited Brexit and the US-China trade war as key factors, adding:
That is intensifying the pressure on Berlin to boost ...
More on: www.theguardian.com