Reuters

The European Central Bank has scaled back its quantitative easing programme from €80bn to €60bn a month from April 2017 and will extend it to the end of next year, in a move that responds to hawks’ concerns about ultra-loose monetary policy but which could unsettle markets. It has held rates as expected.

The ECB insists the step is not equivalent to the US move to gradually “taper” QE that unsettled markets in 2013, instead it argues the move could see it buy more bonds under the extended programme.

Key points

  • ECB holds rates at 0% but extends QE to December 2017
  • Level of bond buying programme cut to €60bn per month from April 2017
  • Asset purchase parameters broadened, including halving of minimum maturity to 1 year
  • Sovereign bond prices recover as Draghi insists tapering has not been discussed
  • Euro slides against the dollar

By Gemma Tetlow and Gavin Jackson

 

MAS_US-elections-2

Voting is underway in one of the most divisive US presidential elections in history that will see either Hillary Clinton or Donald Trump win the White House.

Key points

  • Polls close from 6pm EST (11pm GMT) through to 1am ET across the country

  • The FT’s poll of polls gives Clinton a 3.3 point lead nationally

  • Focus is on a handful of battleground states where candidates are 5 points or less apart.

  • Our results coverage starts at 6pm EST; bookmark our live results page for later

  • Read our live coverage as the results come in

 

European Central Bank President Mario Draghi Announces Interest Rate Decision

The European Central Bank’s governing council has kept interest rates on hold and once again reaffirmed plans to maintain its quantitative easing programme at €80 billion to March 2017 or beyond if needed.

President Mario Draghi SAYS that the next meeting on 8 December “will define the coming months” as he warns the eurozone is subject to “downside risks”. He says there has been no discussion about extending QE beyond next March but that “an abrupt end” to quantitative easing is “unlikely”. He says the governing council had discussed “various options in case we are confronted with a shortage of purchasable bonds in some jurisdictions”

Key points

  • Interest rates are kept on hold in October

  • The ECB’s asset purchase target is unchanged at €80bn per month

  • Draghi signals next meeting in December will be key

  • Draghi says no discussion about extending QE beyond next March

By Mehreen Khan and Gavin Jackson

 

Draghi behind EU symbol

The European Central Bank’s governing council has kept interest rates on hold and reaffirmed its plans to run quantitative easing to March 2017 or beyond if needed

President Mario Draghi told the press conference that the committee did not discussion of its quantitative easing programme. But, that a committee has been tasked with evaluating optinos to “ensure a smooth implementation” of the asset purchase programme.

Economic forecasts were slightly downgraded. GDP growth in 2016 is expected to be 1.7 per cent, falling to 1.6 per cent in 2017 and 2018. This compares to a June forecast of 1.6 per cent in 2016, followed by 1.7 per cent in each of 2017 and 2018. The ECB’s forecast for inflation in 2016 remains unchanged at 0.2 per cent. Inflation in 2017 has been revised down to 1.2 per cent, from 1.3 per cent.

Key points

  • Interest rates are kept on hold in September
  • The ECB’s asset purchase target is unchanged at €80bn per month
  • Economic forecasts are slightly downgraded.
  • Draghi says that the downgrades are “not so substantial to warrant a decision to act”
  • Draghi says the ECB did not discuss an expansion of the asset buying programme

 

APTOPIX France Truck Attack

Key developments

  • At least 84 people are dead after a truck ploughed into crowds, who had gathered for Bastille day celebrations, along the seafront in Nice on Thursday night.

  • French President François Hollande described the attack, which killed at least 10 children and left another 50 people in critical condition, as a “despicable act”.

  • The attacker, who was shot and killed by police, was named as Mohamed Lahouaiej Bouhlel, a Tunisian national with a French visa.

  • There were no claim of responsibility by any terrorist organisation but prime minister Manuel Valls described the attacker as “a terrorist who was certainly linked to radical Islam in one way or another.”

 

The ECB has cut rates further into negative territory as it seeks to stimulate the eurozone amid the global economic downturn.

Mario Draghi has unveiled a whole host of new measures in response to the slowdown in growth in emerging markets and the sharp fall in the oil price.

Key developments

  • Headline deposit rate cut by 10 basis points to -0.40%

  • The asset purchase programme increased from €60bn to €80bn

  • Scope of QE expanded to include non-bank corporate bonds issued in eurozone

  • A new series of targeted longer-term refinancing operations aimed at providing cheap liquidity

  • GDP and inflation forecasts revised down:

  • GDP: 1.4% in 2016, 1.7% in 2017 and 1.8% in 2018

  • Inflation: 0.1% in 2016, 1.3% in 2017 and 1.6% in 2018

  • By Emily Cadman and Mark Odell

 

The latest round of global talks on climate change, dubbed COP21, begins today in Paris. Environmental campaigners want leaders to agree on emissions cuts, with the goal of limiting temperature increases to 2C.

However, prospects of a deal remain uncertain, in part because rich and poorer nations are struggling to agree on how those cuts should be paid for. Developing countries believe that those who have already become wealthy on the back of burning fossil fuels should shoulder most of the financial burden.

Key developments

Read our bluffer’s guide to the talks here.  

Key points

  • Eight arrests and at least two killed, says Paris prosecutor, after French police raid earlier in Saint-Denis, a suburb north of Paris

  • Belgian mastermind of attacks Abdelhamid Abaaoud was the target of the raid but not among those arrested. Bodies yet to be identified

  • Operation “neutralised” a new, heavily-armed terrorist cell, which was ready to strike

  • In the intense firefight during the raid, terrorists fired 5,000 rounds

  • One of the dead is a female suicide bomber, explosion so powerful it collapsed a floor of the apartment

  • Belgian prosecutors have charged two men in connection with the
    Paris attacks

By Mark Odell, Josh Chaffin and John Murray Brown

 

Parisians return to work today following Friday’s attacks, which have left at least 129 people dead and many more wounded. A state of emergency remains in place.

France has responded with a series of police raids at home, and stepped up air strikes against Isis in Syria.

Key points

  • François Hollande declares: “France is at war” and tells French parliament he will seek permission to extend state of emergency declared over the weekend for three months

  • Barack Obama, speaking at the G20, again rules out large US troop presence in Syria

  • French jets have launched strikes on the Isis stronghold of Raqqa, Syria

  • Police raids, more than 150, have been carried out across France, Belgium. Many arrests made

  • Three attackers have been positively identified, all French nationals

  • UK prime minister David Cameron vows to build a case for expanding British air strikes into Syria

  • French police hunt for suspect named as Salah Abdeslam, 26, a French national, and brother of one of the dead bombers

  • A minute’s held silence across Europe

By Mark Odell, Henry Sanderson, Josh Noble and John Murray Brown

 

A series of co-ordinated attacks across Paris has left more than 120 people dead with Isis claiming responsibility.

French President François Hollande has declared a state of emergency and deployed the army around Paris in response to one of the deadliest terrorist atrocities in a western city since September 11 2001.

By Mark Odell and Josh Noble

 

UK economy watchers will be greeted with a deluge of data today, as the Bank of England releases its quarterly inflation report and the minutes of its latest monetary policy meeting. It’ll also give us a rate decision (no change expected) and treat us to a Mark Carney press conference.

Economists and investors will be on the hunt for clues about the timing of any rate rise at the BoE. Expectations were given a jolt earlier this week when Fed chair Janet Yellen made bullish noises on US growth. Many now believe a December hike in Foggy Bottom is a real possibility. We’ve outlined here what to look out for.

Sarah O’Connor, Josh Noble and Mark Odell

 

Michael Horn, head of Volkswagen’s US operations, is the first senior executive from the German carmaker to appear before US lawmakers in the wake of the scandal that broke last month. The US Environmental Protection Agency has exposed VW for fitting software in some of its diesel engines to deliberately cheat emissions tests.

The deception has plunged the company into crisis, put it under regulatory scrutiny around the globe and and left owners wondering if their vehicles are affected.

By Mark Odell and Andy Sharman

 

For the first time, at midday today, the Bank of England is publishing simultaneously its decision on interest rates, the minutes of the rate-setting meeting and its quarterly inflation report. Mark Carney, the governor, is holding a press conference 45 minutes later. Key things to look out for include whether the vote on rates was unanimous and the Bank’s inflation prediction.

 

Eurozone leaders have reached an €86bn deal on a Greek bailout after all-night talks in Brussels. The timetable is for the Greek parliament to pass a slew of legislation by Wednesday, the deal will then be put to some eurozone parliaments – notably Germany’s Bundestag – and then negotiations will begin with creditor institutions over the exact size of the bailout .

 

Late on Thursday night Greek prime minister Alexis Tsipras submitted a new plan for his country’s economic overhaul to bailout monitors. The clock is now ticking. Will it be accepted, or, come Sunday, will Greece topple into bankruptcy?

 

With the clock ticking towards Sunday and an emergency summit of all 28 EU members, Greece has only days to reach an agreement with its creditors or face bankruptcy.

All eyes on Wednesday were on Alexis Tsipras as he addressed the European Parliament and submitted a fresh bail-out application, even as European Commission president Jean-Claude Juncker said preparations were in place for humanitarian aid for Greece in the event of “Grexit”.

Angela Merkel, German chancellor, had insisted that Athens come up with a full range of reforms that could cover a multi-year rescue programme.

 

After the overwhelming No vote, the focus today is back on Greece’s negotiations with Brussels, culminating in Alexis Tsipras’s government being given a final chance by eurozone leaders to present new reform proposals this evening.

The meetings will also mark the introduction of new Greek finance minister Euclid Tsakalotos, an Oxford-educated Marxist, who replaced Yanis Varoufakis after he was asked to step down in a conciliatory move by Mr Tsipras.

Elsewhere, eyes will be focused on Greek banks, which remain closed for the next two days. The ECB may also have to ask eurozone leaders to guarantee Greek government debt for use as collateral to maintain its liquidity lifeline.

 

After delivering a decisive No vote in Sunday’s referendum, in which voters backed Athens’ call to reject a compromise with international creditors, Greece is facing the prospect of even greater turmoil as it tries to tries to prevent the collapse of a financial system that is rapidly running out of cash.

Prime minister Alexis Tsipiras has said he is ready to resume talks immediately, while politicians and officials in the rest of the eurozone are holding a series of meetings to decide what to do next.

Key developments so far:

● Greek PM Tsipras will present fresh bailout proposals at the EU summit on Tuesday
● Greek finance minister Yanis Varoufakis quits and is replaced by Euclid Tsakalotos, previously the coordinator of negotiations with Greece’s lenders
● Markets remain relatively unruffled after No vote
● ECB governing council increases the haircut on the collateral posted by Greek banks in exchange for emergency liquidity

 

After another day of negotiations the Greek government has failed to reach an agreement with its bailout monitors – the International Monetary Fund, the European Commission and the European Central Bank – on Athens’ reform plans.

Eurozone finance ministers are going to meet again on Saturday to try and broker a deal before the Greeks’ June 30 deadline to repay €1.5bn to the IMF.

 

Benjamin Netanyahu is making his third appearance before a joint meeting of the US Congress on Tuesday morning in Washington.

In what is set to be a very controversial speech, he is expected to highlight what the Israeli leader insists are the risks of a nuclear deal with Iran

By Mark Odell and Sam Jones, Defence and Security Editor, and Siona Jenkins, Middle East and Africa news editor