Hardware raw materials market affected by ECB rate cut

The European Central Bank, headquartered in Frankfurt, Germany, held its monthly monetary policy meeting on December 8 and decided to cut the leading euro zone interest rate by 0.25 percentage points from the current 1.25% to 1%.

This is the second consecutive month the European Central Bank lowered the leading interest rate in the euro zone. On November 3, the European Central Bank lowered the interest rate by 0.25 percentage points. Analysts here believe that the ECB's decision to cut interest rates is based on two considerations: First, the outlook for economic growth in the euro zone is bleak and there is a possibility of a recession next year. The European Central Bank cut interest rates to stimulate economic growth; Second, despite the current euro zone inflation rate has reached 3%, far exceeding the 2% warning line set by the European Central Bank to maintain stable prices, but the euro area inflation rate may fall to next year 1.7%, which provides the European Central Bank with room for rate cuts.

On the 8th, some European central banks began to consider emergency plans to prepare for the possibility of individual countries leaving the euro zone or disintegrating the euro zone. According to the report, the European Central Banks have only made initial preparations, which does not mean they expect the euro to end in full. However, the fact that the central bank began to consider emergency plans is enough to show that the situation in the euro zone is rapidly deteriorating.

For the second time the European Central Bank cut interest rates in less than two months, financial experts Zhao Qingming said that this further increases the possibility of China's interest rate cuts.

Zhao Qingming said that the European Central Bank's move is in line with previous market expectations. The purpose of interest rate cuts is to stimulate the real economy and to save the recessed EU economy. Second, to ease the debt crisis in Europe, increase confidence in the financial market, and reduce the cost of crisis country bonds. There is indeed a need for such a monetary policy to strengthen the market and people's confidence. However, if the euro zone countries cannot make substantive reforms in fiscal revenue and expenditure, the current relaxation of monetary policy is tantamount to quenching thirst. For China, the European Central Bank cut interest rates twice in the short term, which further increased the possibility of China's interest rate cuts. Zhao Qingming predicted that there is a possibility of interest rate cuts before and after the Spring Festival.

The poor performance of the euro area has a lot to do with the European debt crisis. On the one hand, companies are pessimistic about the economic outlook and are reluctant to expand production. On the other hand, in some countries such as Greece, due to the implementation of fiscal austerity, which has hurt the fragile growth of the economy, due to the fact that France and Germany have reached a new resolution to resolve the European debt issue and the European Central Bank cut interest rates, China’s price level is expected to fall in November. All of them reflect the expectation that the macro environment will continue to relax. Investor feedback is relatively positive, but it is still mostly wait-and-see mood, and the thread continues to oscillate. According to the information feedback, after the thread opened slightly lower on the 7th, after the short-term trading session on the day of departure, the steel price rebounded slightly, and closed at 4160 points in the last session, down 6 points from yesterday.

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