The European Central Bank chose to leave rates unchanged this morning with the benchmark remaining at zero for lending and a –0.4 percent for deposits. ECB president Mario Draghi continues to face an uphill battle as slack demand at home and abroad dog growth prospects. Despite signals that the bank is willing to execute more stimulus measures, many investors have begun to question whether further monetary policy actions will bear fruit. With Japan as an example of seemingly endless stimulus that has seemingly accomplished little, some more cynical analysts are arguing that further action will affect financial markets much more significantly than the underlying economy.
Brazilian president flies to U.S. as impeachment process rolls on. Embattled Brazilian President Dilma Rousseff will attend a United Nations climate summit in New York today as opposition lawmakers prepare for a Senate vote on her impeachment following the lower house decision to move forward on Sunday. Rousseff has accused her vice president Michel Temer of being part of a “coup” to oust her.
Sony profits drop. Japan’s Sony Corp. released full fiscal-year earnings yesterday that revealed a nearly 10 percent shortfall in operating income versus earlier guidance. Although lower than initial estimates, the results represent a major rebound from returns during the prior year, which were marred by a 60 billion yen ($547 million) writedown for the company’s camera business.
Volkswagen near deal on emissions scandal. Citing unnamed sources, Reuters reported today that executives at Wolfsburg, Germany-based Volkswagen will be announcing a repurchase of nearly a half million diesel vehicles in the U.S. in a move to resolve the ongoing emissions rigging scandal. Volkswagen shares rose by more than 6 percent in European trading on the news, as investors welcomed signs of closure on the scandal.
Sweden’s central bank increases quantitative easing. Policymakers at the Riksbank today announced a nearly $6 billion in additional quantitative easing to combat deflation. The bank’s benchmark interest rate remained at –0.5 percent.
China cracks down on finance startups. State-controlled media sources today announced that China’s State Administration for Industry & Commerce has halted the registration of new online financial-services firms in China. The move comes as regulators in Beijing grapple with oversight for new financial services models such as peer-to-peer lending.
