Don't see ECB cutting any rates post meeting: CooperCity

The European Central Bank (ECB) meeting today to discuss and decide on the eurozone economic data is an important event that the global markets are watching out for. The consensus is  that they will not do anything on rates, but unemployment numbers have been bad in almost all countries. In an interview to CNBC-TV18, Louise Cooper, financial analyst, CooperCity gives his views on the expectations of the ECB meeting.

Below is the edited transcript of Cooper's interview to CNBC-TV18.

Q:  What is the expectation from the meeting? Do you think the ECB might show some sympathy to the falling employment and the bad German industrial output numbers?

A: I don’t think ECB is likely to cut rates right now. They are almost on the floor anyway. So, there is only a certain amount that they can go further. To be honest, the ECB has been very generous with its Long-term refinancing operation (LTRO) and Outright Monetary Transactions (OMT) policies. So, the ECB feels it has done a awful lot already, to support the European equity markets and European economy. Q: What have you made of the move on the euro-dollar? Is it primarily driven by the dollar strength although the dollar index hasn’t moved much beyond 80.4. You think there is no expectation of any ECB move? Or could we see a slight disappointment?
A: I don’t think any ECB move is anticipated today. We have got quantitative easing (QE) in the States, we have got ECB doing versions of QE and the UK doing QE as well. So, which QE do you want to be exposed to. Which money printing, which inflationary policies do you wish to be exposed to is the question. Japan too is doing it too. Politicians want their currencies devalued because they are now desperate for export growth. Q: What are the markets really watching for? Are there any events lined up that you would closely watch out for other than the confrontation over the debt ceiling in the US?
A: The fourth quarter Gross Domestic Product (GDP) from Europe are going to be watched very closely. The earnings season kicked off with Alcoa in the States earlier this week, but there is definitely a bit of a gap opening up between corporate profit situation and stock price levels and that depends on the markets and how big the gap is. However, corporate profitability is not looking great in Europe and the UK. The stock markets are at very high levels still. So, the earnings season is going to be very closely watched.
In terms of political developments we have moved on from Washington and Brussels to see what companies come up with. We will later go back to looking at what the politicians are up to.