The European Central Bank's Executive Board member, Isabel Schnabel said on Monday that only the European Court of Justice has a saying regarding the actions of the ECB, making a reference to the German top court that previously ruled that the Bundesbank wasn't allowed to participate on the bank's bond purchasing program unless the bank can prove it's legal in the next three months.
“We will continue to conduct the public sector purchase program and the pandemic emergency purchase program, as well as our other monetary policy measures, in line with our mandate,” she said, “The European Court of Justice has exclusive jurisdiction over the ECB and its actions,” she added, highlighting that the bank was always assessing whether its policies are “suitable, necessary and proportionate.”
She also said that the central bank is ready to adjust the size and the duration of its emergency bond purchase program, adding that those measures form a powerful package. She also highlighted that the bank has to make sure that monetary policy is transmitted to all parts of the Eurozone and that the bond purchase program is good in terms of avoiding diverging spreads.
Schnabel also emphasized the need for a European recovery fund that would provide loans and grants to the Eurozone members. This, according to her, would help to foster investment.
In other news, Deutsche Bank recently updated its forecast for the German economy. They now foresee a quarterly 14 percent Gross Domestic Product drop and a 9 percent yearly contraction. They also foresee a significant plunge in industrial production, as they expect a fall between 10 and 15 percent. Unemployment is set to increase to 7 percent this year.
By 7:35 GMT the Euro went down by 0.07 percent against the US dollar, falling to the 1.0832 level. On the other hand, it climbed 0.07 percent against the Pound Sterling, hitting the 0.8741 level, increased 0.07 percent against the Swiss Franc, at 1.0529, and advanced 0.47 percent against the Japanese Yen, hitting the 116.16 level.
Japan's Government is Considering Steps to Help Big Firms
The Japanese Prime Minister Shinzo Abe said that the government is considering taking additional stimulus measures to help big firms and support students that have lost their income sources.
"If we decide that additional steps are needed, we will take bold and timely action," he told the parliament, "It's important to act with speed," he added.
The size of this additional stimulus package is still not clear, but analysts think that it will not be very big considering the Japanese public debt levels (it is twice the size of the whole Japanese economy).
"The size of a second extra budget will be smaller than the first one. Even so, additional bond issuance is unavoidable," said an analyst at Mitsubishi UFJ Morgan Stanley Securities.
By 7:48 GMT the US dollar went up by 0.51 percent against the Japanese Yen, hitting the 107.20 level. Conversely, the Euro advanced 0.43 percent against the Japanese Yen, hitting the 116.12 level.