Draghi: ECB has ‘plenty of instruments’ to boost inflation

USA stocks rallied with equities in Europe and Asia as the central-bank comments calmed markets after several weeks of volatility.

The quarterly Survey of Professional Forecasters, a survey of experts affiliated with institutions in the European Union, which doesn’t represent the views of ECB staff, cut its inflation forecast for the current year by 0.3 percentage point to 0.7%.

Mario Draghi said he’s concerned about the outlook for euro-area inflation and is determined to reach his price-stability mandate, a day after saying the European Central Bank could step up its stimulus as soon as March.

“Bond yields are now higher and prices lower as the equity market had another day of small recoveries”, he said.

According to the ECB’s regular quarterly survey of professional forecasters, eurozone inflation is expected to average 0.7 percent this year, but then pick up to 1.4 percent in 2017 and 1.6 percent in 2018, moving closer to the central bank’s target of just under two percent.

“More action will be needed by other central banks like the BOJ and the PBoC in order to bring much needed long-term calm and optimism back into the markets”, said City of London Markets trader Markus Huber, referring to Japan and China. Australia’s currency advanced more than 2 percent from a week earlier, while the rand added 1.8 percent and the Norwegian krone gained 0.8 percent.

United Kingdom and European markets rallied on Friday (22 January) following their Asian counterparts firmly into positive territory as commodity-related stocks surged on the back a solid rebound in oil prices.

KEEPING SCORE: In early European trading, France’s CAC 40 added 3.0 percent to 4,332.78 and Germany’s DAX rose 2.0 percent to 9,762.41 Britain’s FTSE 100 climbed 2.23 percent to 5,902.61 USA stocks were poised to open higher.

The South Korean won and the Malaysian ringgit were among top gainers, after taking a battering over concerns of slowing global economic growth, the impact of a USA rate rise and a slump in oil to below $30 a barrel.

The decision fell in line with most analysts’ expectations and there was little change in the EUR/USD dollar rate after the release, which stood at 1.0903.

US crude oil remained under pressure on Thursday after hitting fresh lows not seen since 2003 Wednesday, as markets anticipate that the persistent oversupply issues will continue to weigh on markets.

“Lower oil prices are maybe great for the consumer, but not unilaterally good for the USA economy”.

“What drove the market down was fear”, Flynn said.