The euro is strong against the pound this morning, as German consumer confidence unexpectedly held steady at 9.7, despite negative GDP growth. Yesterday’s speech in Manchester from the ECB’s de Guindos also served to ‘soothe’ expectations for stimulus packages.
He told the conference that financial market prices were not driving the ECB, saying ‘monetary policy is data-dependent, not market- dependent: indications from market expectations cannot replace our policy judgment.’ He also warned against the use of advance economic indicators in judging the economic situations, arguing that ‘the more forward guidance we give, the less informative are market signals for gauging the state and the expected evolution of the economy’ due to the ‘echo chamber’ it creates.
Today, European Union officials will meet the UK’s main Brexit negotiator, David Frost, to discuss alternatives to the Irish backstop. However, Ireland is still unkeen to re-open talks, and Deputy PM Simon Coveney has started a five-day tour of European capitals to argue for the importance of the backstop and Good Friday Agreement.
