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Markets seesaw after ECB unveils sweeping stimulus package: as it happened

European Central Bank cuts key rateand announces it will re-initiate quantitative easing
Euro and stocks both volatile as traders digest Mario Draghis calls for government spending
Changes are aimed at stimulating struggling currency bloc
Should you back European stocks amid change at the central bank?
Robin Pagnamenta:Confusion, queues and shoplifting: why we aren't yet ready for till-less supermarkets
5:02PM
Wrap-up: Draghi speaks, markets squirm
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Todays was Mario Draghi last rates decision as ECb President

Credit:
Alex Kraus/Bloomberg
Thats one way to make an exit. Mario Draghi has pressed down on the accelerator, told Christine Lagarde to take the wheel, a rolled out of the side door. Markets were rattled, but ultimately ended strengthening as did the euro.
Ms Lagarde, who must now keep the eurozone show on the road, has been handed aggressive monetary policy, hungry markets and what may be her greatest challenge an ECB demand that governments pay their own way through fiscal top-ups.
How ECB monetary stimulus has spurred Eurozone GDP growth
Todays decision was tense even as I write, Bloomberg is reporting that Mr Draghi faced an unprecedented revolt from policymakers as he moved to re-introduce QE. Those voices from the back may grow louder once Mr Draghi has gone.
Speaking of exits, thats me done for the day. Im off tomorrow, and in the absence of any major economics news on the schedule, so is the live blog. Ill be back as usual on Monday, when well begin looking forward to the latest clash in the war between Donald Trump and Fed chair Jerome Powell.
4:43PM
European blue chips hold gains to close
Phew that could easily have gone the other way. With markets closed, European blue-chip indices managed to stay in the green, with the FTSE 100 hanging on by its fingertips.
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Credit:
Bloomberg TV
4:23PM
ITV among FTSEs biggest fallers after downgrade
ITV is one of the FTSE 100s biggest fallers today (in second place to the reliably volatile NMC Health).
Shares are off 4.2pc currently, following a downgrade to hold by Shore Capital analystRoddy Davidson.
Heres what I wrote about the broadcaster yesterday:Market report:ITV hit by jitters as Apple changes tack
3:34PM
Stocks flip positive again
European stocks are back in the green after a whipsaw ride over the last hour clearly traders are finding theres a lot to digest in Mario Draghis statements and the ECBs latest moves.
Over on Wall Street, where investors are reacting to the slightly clearer news of seemingly reduced tensions between the US and China, the S7P 500 and Dow are up about 0.4pc and 0.5pc apiece, and the Nasdaq is up about 0.8pc.
3:16PM
Full report: Draghi moves to battle economic slowdown
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Outgoing ECB president Mario Draghi is going with a bang, raising the prospect of negative rates for years to come

Credit:
Alex Grimm/REUTERS
Heres deputy economics editor Tim Wallace with full details on the ECB package:

The European Central Bank is cutting interest rates deeper into negative territory and will restart money printing in November as Mario Draghi moves to battle the eurozones economic slowdown.
Banks now face a rate of minus 0.5pc on their deposits held at the ECB in Frankfurt, down from minus 0.4pc previously.
However in an acknowledgement that this charge is painful for lenders and that negative ratespotentially undermine efforts to boost the economy, they will be allowed to store some money at 0pc, with only excess deposits charged interest, in a bid to boost lending.
You can read his full report here:Permanently negative rates: Draghi cuts interest rates and reloads QE as ECB removes time limit on stimulus
3:11PM
Meals on wings: Grocers prepare to air lift food in event of Brexit problems
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Predictions for a worst-case Brexit include stocks running low in supermarkets

Credit:
Chris Ratcliffe/Bloomberg
Some of the UKs biggest supermarkets Morrisons, Waitrose and the Co-op are preparing to fly in food by plane in the event of a disorderly Brexit. Retail correspondent Laura Onita reports:

The comments come after the government officially admitted on Thursday that a disorderly Brexit could lead to food prices going up and a reduction inthe choice of goods available to shoppers in supermarkets.
You can read her full report here:Grocers prepare to air lift food in case of no-deal Brexit shortages
3:03PM
European stocks now down
Stocks have taken a sharp downwards dip as Mario Draghis words sinks in: the ECB has done what it can, government have to take it from here.
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Credit:
Bloomberg TV
Ronald Temple from Lazard Asset Management says:

Today the ECB used more of its dwindling ammunition to try to stimulate growth. Draghi rightly emphasized the imperative of fiscal stimulus and structural reforms. Unfortunately, Eurozone governments have failed to deliver on this count for a decade now, in spite of ever lower financing costs.
The ECB has done its job; now its time for the governments to step up.
2:40PM
Round-up: Topshop flop, Morrisons stays close to Amazon, unicorn Improbable buy game developer
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Sir Philip Greens key brand slipped to a ?498m loss last year

Credit:
JULIAN SIMMONDS/The Daily Telegraph
Mario Draghi finished up speaking a few minutes ago here are the stories you may have missed amid all the excitement:
Sir Philip Greens Topshop plunges to ?500m loss:Topshop and Topman, once the jewelin thecrownof billionaireSir PhilipGreens retail empire, slumped to a loss of almost half a billion pounds last year as sales collapsed.
Morrisons extends Amazon delivery tie-up to more cities:The FTSE 100 grocer is taking full advantage of its tie-up with Amazon to expand its swift grocery delivery service across the country.
British unicorn Improbable swoops on US game developer in push to revive growth: TheSoftBank-backedvideo game technology company has bulked up its capacity to develop new games, buying its first established studioin a move expected to revive revenue growth.
Technology intelligence - newsletter promo - EOA
2:26PM
Russell Lynch: Dont expect a similar performance from the Bank of England
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Bank of England governor Mark Carney

Credit:
CHRIS J RATCLIFFE/AFP
Economics editor Russell Lynch has given his snap take on the ECBs decision and Mario Draghis statements. He writes:

The Italians latest monetary salvos - including open-ended money printing and bolstered forward guidance - havebeen telegraphed since the ECB's Sintra conference in June when he signalled to markets that additional stimulus wouldbe required.
And the Fed has been in easing mode since the turn of the year, even if not at a quick enough pace to prevent Donald Trump delivering regular tongue-lashings to Fed chair Jay Powell on Twitter.
But the Bank of England wont be joining the party. In Europe and the US the problem faced by central bankers is one of undershooting inflation and faltering growth. Thats particularly true of Germany after yet more disappointment for the eurozones economic engine, which isveering towards recession.
You can read his full thoughts here:Dont expect the Bank of England to follow the ECBs monetary fireworks
2:19PM
Chance of eurozone recession small
Draghi says the ECB still see the probability of a eurozone recession as small, but says it has gone up.
Looking at the specific case of Germany, he nods to this mornings IFO Institute reportand says the country is a case for timely and effective fiscal action
2:17PM
More reaction to the ECBs decision...
Rosie McMellin of Fidelity International says:

While both the deposit cut and the amount of monthly purchases fall short of market expectations, this is more than outweighed by the changes to the forward guidance and open-endedness of the measures. Todays package will likely reinvigorate the hunt for yield, and we would expect credit markets to rally.

Seema Shahof Principal Global Investors says:

Although Draghi may have disappointed the market with a smaller deposit rate cut than the market was hoping for, surely he has more than compensated for that by delivering open-ended QE. No wonder Italian bond yields have fallen to record lows. If asset purchases are focused on corporate debt, the market impact will be even more powerful.
Eurozone banks are the other clear winners from todays ECB decision. The tiered deposit scheme, together with easier terms for TLTROS, should smooth the monetary transmission mechanism and support bank lending, permitting dovish central bank policy to impact the economy in the direction that is intended.

State Streets Tim Graf says:

Draghi has also built a dovish platform upon which his successor, Christine Lagarde can build when she takes over in November. At this stage, it is hard to see much more policy innovation in the coming six months, but this is probably not a buy signal for the euro or a sell signal for European government bonds.
2:12PM
Draghi says disagreement over QE was overcome
The first day of the ECBs meeting on Wednesday overran, with a publicly-split group of policymakers struggling to settle on the details of this package. Mr Draghi said initial divisions over re-introducing quantitative easing were overcome.
Note that the European Parliaments new draft #Brexit resolution suggests avoiding a no deal exit is a good enough reason for granting an extension. So not just for an election, a referendum or a massive rethink then... pic.twitter.com/a2zpygl6tI Adam Fleming (@adamfleming) September 12, 2019
Unpacking the reasons behind the ECBs decision, Mr Draghi says the ECB is reacting to the continued prominence of downsides risk, such as the US-China trade war, or Brexit. On that topic:
Note that the European Parliaments new draft #Brexit resolution suggests avoiding a no deal exit is a good enough reason for granting an extension. So not just for an election, a referendum or a massive rethink then... pic.twitter.com/a2zpygl6tI Adam Fleming (@adamfleming) September 12, 2019
2:07PM
Draghi reacts to Trump
Mario Draghi has been asked about his react to Donald Trumps tweet on rate cuts (see 1:18pm update).
He says: We have a mandate: we pursue price stability, and we dont target exchange rates, period.
Explaining with the ECB has taken so many steps to protect lenders, Mr Draghi says it is attempting to protect the smooth transmission of the lending channel.
1:57PM
Draghi calls on governments to take action
Breaking News
Draghi goes out with mini-bang as ECB goes back to its toolbox and pulls out quantitative easing just nine months after ending the program.
+20 billion Euro QE for as long as needed
+Deposit rates -0.5 from -0.4

some were looking for even more draconian moves Charles V Payne (@cvpayne) September 12, 2019
Draghi explains that three key factors spurred the ECB into action this afternoon.
A protracted slowdownin the eurozone hasbeen more marked than expected.
Risks to the economy, such as the trade war and other geopolitical risks, have persisted.
And finally inflation expectations have slipped in recent months.
He says that there was complete agreement on the Governing Council that fiscal policy needs to play a much more active role in reviving growth.
It is time for fiscal policy to take charge,he argues.
1:49PM
Euro sinks after ECB slashes forecasts
Draghi introduces the GDP and inflation outlook for the euro area pic.twitter.com/ROiKrLQazO European Central Bank (@ecb) September 12, 2019
The euro is tumbling further on currency markets after ECB president Mario Draghi delivered a slew of big downgrades for growth and inflation in the coming years.
Growth will slow to 1.1pc this year and edgeup to 1.2pc in 2020, down from June's forecasts of 1.2pc and 1.4pc, respectively. Inflation is seen at just 1pc next year, down from 1.4pc.
Mr Draghi said the risks to growth "remain tilted to the downside".
He explained:

"These risks mainly pertain to the prolonged presence of uncertainties related to geopolitical factors, the rising threat of protectionism, and vulnerabilities in emerging markets."
1:18PM
Trump tweets...
The US President has naturally used this opportunity to take a shot against the US Federal Reserve who (in case you have been under a rock) he really, really wants to slash rates.
European Central Bank, acting quickly, Cuts Rates 10 Basis Points. They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports.... And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest! Donald J. Trump (@realDonaldTrump) September 12, 2019
1:15PM
European stocks rise
The announcement has injected some life intolanguishing European markets, which were most flat before. The Europe-wide STOXX 600 is now up 0.43pc,
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Credit:
Bloomberg TV
INGsCarsten Brzeski says:

The final showdown has started with a big bang. The ECB just announced a big policy package to revive the Eurozone economy and to bring inflation back to target. Here is what the ECB will do:
Deposit rate cut by 10 basis point to -0.5pc.
A tiering system will be introduced.
Forward guidance on rates is no longer calendar based but open-ended and state-dependent.
QE will be restarted with 20bn euro per month, starting 1 November. There is no end date added to QE.
The TLTROs will be repriced and include an incentive for banks to increase lending. Along the lines of the first two generations of TLTROs, banks which exceed the benchmark ECB loans will be charged at the deposit rate.
This isMario Draghis final whatever it takes. Depsite all market excitement now, the question remains whether this will be enough to get growth and inflation back on track as the real elephant in the room is fiscal policy. It is clear that without fiscal stimulus, Draghis final stunt will not necessarily lead to a happy end.

TLTROs, by the way, are long-term loans to commercial banks, compensating them for negative rates in a bid to push up lending.
1:11PM
Reaction: The ECB is all in; buckle up
Pantheon Macroeconomics Claus Vistesen has offered his rapid take:

Markets initially reacted in a disappointing fashion to the news that the ECB has onlycut its deposit by 10bp, but as we type short-term yields and the euro are falling. Thats probably the right call. The details suggest that the central bank is going all in.
1:07PM
Euro drops, golds gains after ECB decision
The euro has fallen sharply following the ECBs decision, hitting its lowest level in over a week, while gold has risen. Well have to wait and see how it performs during Mario Draghis press conference in just over 20 minutes.
Ranko Berich, an analyst atMonex Europe, says:

At first glance, the ECB has not quite thrown the kitchen sink at the eurozone economy. The QE package at 20bn/m is shy of market expectations, which were 30 billion a month.But the Bank is clearly back in the business of serious policy easing and more aggressive action could easily be taken in response to a worsening in conditions.
There are arguments for the ECB to hold back some of its ammunition. The current growth slowdown is focussed in the manufacturing sector, particularly in Germany, and there are as yet few signs of the slowdown hitting consumers.The Eurozone as a whole is now a high beta economy that is extremely sensitive to external demand, particularly from China. A sudden improvement in global conditions for example, due to a US-China trade resolution - could easily see Eurozone growth pick up rapidly.In this context, it makes sense for the ECB to reserve some ammunition.
With the current pace of asset purchases at 20bn and tiered deposit rates in place, there is clearly room for the ECB to ease further and depending on forward guidance from Draghi, and eventually Lagarde, markets may end up getting ahead of the curve and selling EUR pre-emptively.
1:03PM
Snap take: European Central Bank unveils extensive stimulus package
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Mario Draghi (right) will soon hang over to successor Christine Lagarde, formerly of the IMF

Credit:
Francois Lenoir/REUTERS
The European Central Bank has released a sweeping stimulus package as it tries to inject fresh life into the eurozone, which has been battered by Brexit uncertainty and a trade war slowdown.
The central announced it would cut its key deposit rate by 0.1pc in line with expectations, but lower than some had hoped and re-initiate a process of quantitative easing by buying20bn of debta month for an indefinite period of time: as long as necessary.
The changes are far-reaching, but are not as extreme as some analysts had predicted.
The announcement of looser policy is remarkable, given the ECB said it was done with its dovish approach as recently as nine months ago. But global events, which have weighed particularly on the blocs industrial champion, Germany, have forced policymakers to once again crack out the stimulus.
1 of 3@ECB President Mario #Draghi seems to have gotten most of what he wanted:
10 bps rate cut to minus 50 bps;
Two-tier system to help the #banks;
More aggressive forward guidance;
#QE restart at 20 billion per month; and
An open ended QE.
Absent a communication... Mohamed A. El-Erian (@elerianm) September 12, 2019
Smaller than expected rate cut but interesting with open-ended QE - very strong signal in our view! $EUR weakens and $EUR yields are lower ? https://t.co/xoFjPP0ta5 Danske Bank Research (@Danske_Research) September 12, 2019
12:56PM
Reaction from Twitter
Euro drops below $1.10 following ECB decision The ECB has cut the deposit facility rate by -10bps as expected to -0.50%. It has also changed guidance from calendar based to data based. QE has been reintroduced in open-ended format at a pace of 20bn/mth. https://t.co/l3TNOEsxMb pic.twitter.com/jfpgAV9Yki Holger Zschaepitz (@Schuldensuehner) September 12, 2019
reckon that's a minimum 2 yr QE programme - so EUR 480bn. But probably longer. econhedge (@econhedge) September 12, 2019
Outcome slightly underwhelming vs. consensus ("only" -10bps & "only" 20bn/m.) The rest seems spot on. https://t.co/HWOr7n2iG4 JohannesBorgen (@jeuasommenulle) September 12, 2019
12:51PM
ECB re-initiates QE, will bring in a two-tier system for negative rates
The ECB says it will re-trigger a process of quantitative easing at a rate of 20bn per month, and introduce a two-tier negative ratings system to reduce the impact sub-zero rates have on lenders (who must give money to the central bank).
My colleague Tim Wallace writes:

Mario Draghi has underwhelmed a little here. Markets thought there was a decent chance of a 20 basis point cut in rates, so this is not going to impress anyone. Analysts also anticipated 30bn40bn of QE each month for around nine months, so 20bn is a little light. That said, the bond purchases will run for as long as necessary, so in the end this could amount to a bigger loosening of policy than it initially appears.
12:47PM
BREAK: Rate cuts land on expectations
Here are some breaking toplines from the ECB:
New asset purchases
Benchmark interest rate unchanges
Marginal lending rate unchanged
Deposit facility rate cut to -0.5pc, meeting expectations
ECB will buy bonds as long as needed
ECB The interest rate on the deposit facility will be decreased by 10 basis points to -0.50%.....
Net purchases will be restarted under the Governing Councils asset purchase programme (APP) at a monthly pace of 20 billion as from 1 November. #QE Shaun Richards (@notayesmansecon) September 12, 2019
BREAKING! The #ECB lowers the deposit rates to -0.5% and starts new round of open-ended #QE pic.twitter.com/qtO2h2em14 jeroen blokland (@jsblokland) September 12, 2019
12:36PM
European stocks are still looking pretty flat, with just minutes to go until the ECBs decision is announced
Wire reporters will have seen copies of the ECBs plans, so Ill try to get the gist of it all through to you as soon as possible after quarter to.
As ever, sound and fury is likely to follow the announcement, but myself and the brains on the economics desk will try to cut through with some clarity.
The live video of Mario Draghis press statements will run here:
12:28PM
What will Mario Draghis exit mean for European stocks?
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Mario Draghi holding a giant replica euro

Credit:
JOHN THYS/AFP
With Mario Draghis time at the European Central Bank nearly up, what will happen to European stocks after his exit?
Thats the question our Money team has set out to answer. Investment editor Taha Lokhandwala writes:

The end of his tenure therefore leaves questions over whether investors should cut and run or hold out.
European shares have risenthis week as investorsexpect more support for marketsat the central banks meeting Mr Draghis final act as governor. He is the man credited with saving the euro zone but will be replaced by Christine Lagarde come November.
Mr Draghi was behind theplan to pump nearly 3bn (?2.7bn) into European bond markets which eventually filtered through to stock markets and pushed up share prices.
European stock markets have performed well since the central bank opted to protect the euro
You can read more here:Should you back European stocks amid change at the central bank?
12:20PM
BP considers oil project closures to reduce environmental impact
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

BP is coming under increasing pressure to adapt its businesses

Credit:
Arnd Wiegmann/REUTERS
BP is prepared to sell off some of its oil projects to help it meet its green ambitions, its chief executive has said. My colleague Julia Bradshaw reports:

Bob Dudley said one way to help reduce greenhouse gas emissions was to sell some of its most carbon-intensive projects, although he would not say which assets BP was targeting.
Earlier this year shareholders voted to forceBP to explain how it is aligning its operations with the Paris climate change agreement of 2015 by issuing a report on the matter before its annual general meeting in May next year. Thisputssenior managers are under pressure to come up with solutions.

You can read her full report here: BP chief: Well sell oil projects to meet climate change goals
12:06PM
No-deal Brexit: What you need to know
In the spirit of the Operation Yellowhammer discussion that has spilled onto today, theTelegraphsMoney team have looked at the key thingspeople need to know in order to prepare for a disorderly exit from the EU (should it occur):
How no-deal Brexit will affecttravel bookings, currency exchange and duty free
What would a no-deal Brexit mean for your personal finances?
No-deal Brexit: what could this mean for your savings?
What will happen to house prices in a no-deal Brexit and will it be a good time to buy?
How likely is a no deal Brexit in 2019?
You can follow the latest political updates here:
Brexit latest news: Boris Johnson says he did not lie to the Queen over proroguing Parliament and that such claims are absolutely nottrue
11:49AM
Tweet: Euro holds ahead of ECB decision, bucking trends
Looks as if #ECB's Draghi has lost his magic touch on the #Euro. The common currency fell on the day of the decision in 11 of the 16 meetings held in the last 2yrs. But the most recent ECB announcements delivered 3 of the 5 exceptions, BBG says. pic.twitter.com/vyRWW74kb1 Holger Zschaepitz (@Schuldensuehner) September 12, 2019
11:48AM
Full report: German factory slump means country is in recession
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

German factory production has slipped in recent months

Credit:
INA FASSBENDER/Reuters
Heres a full report on this mornings IFO Institute report, which offered some grim reading on the state of Germanys economy. Tom Rees writes:

The research group cut its forecast for 2019 economic growth to 0.5pc, warning that the weakness in Germany's huge industrial sector is spilling over into the rest of the economy.
The Ifo expects GDP to contract by a further 0.1pc in the third quarter, a second consecutive quarter of falling output - meaning a technical recession.
This downturn was triggered by a series of world political events that call into question a global economic order that has grown over decades, warned Timo Wollmershaeuser, head of forecasts at Ifo.
You can read more here:Germany in recessionas factory output slumps
11:22AM
ECB preview: What the experts say, in detail
With just over an hour and a half until the ECB announces its rate plans, heres what some analysts are predicting.
OANDAs Craig Erlam sets our scene:

The big event today is undoubtedly the ECB and whether Draghi is going to go out with a bang or a whimper. Everyone is convinced Draghi means business today and is packing the bazooka for one last showdown. Investors have high expectations with a rate cut, QE and tiered deposit rates expected, combined with all the technical adjustments that makes it all possible.
I can't help but fear that investors have got a little ahead of themselves here. There are hawks on the board that have repeatedly questioned the need for stimulus and I question whether Draghi's penultimate meeting as President is appropriate for such a huge package. Draghi isnt shy of bold policy decisions though, as we've seen over the last eight years so who knows.
Later today: watch live as ECB President Mario Draghi explains todays monetary policy decisions. pic.twitter.com/ttfJFV1TVA European Central Bank (@ecb) September 12, 2019
Royal Bank of Canada analysts say:
We expect the ECBto cut the deposit rate by 20bps, with the possibility that they could go further with a 25bp cut. We continue to expect a follow-on rate cut in December. We expect all other key rates to remain unchanged.
We continue toexpect a tiering of the deposit rateusage to come with an initial small allowance of deposits to be remunerated at the refinancing rate. We think this is one of the key issues for banks and bank stocks and the question is whether the ECB allows a large percentage of excess reserves to be placed at the refi rate which would help the banking system quite a lot but might risk an adverse reaction in the money market or opt for a smaller amount (say EUR 400-500bn). We expect the latter with a revision date in the future that might see an increase of that allowance.
We expect theforward guidance to be strengthenedby removing the time reference after the or lower reference and also bymaking an explicit reference to the symmetry of the inflation target.
Wedo NOT forecast the ECB to announce a QE restartat this meeting, but expect that they will leave this option firmly on the table for future meetings to decide.
We do not expect the staff forecasts to be subject to significant alterations
They add:

The most contentious part of the package to be announced today surrounds the restarting of QE, where we remain in the minority in calling for no announcement today. With the market priced in for the restart of QE in the magnitude of EUR 30-40bln/month, even if QE is announced, we think it will likely be less aggressive and hence there is still room for the ECB to disappoint the market in this scenario.
Economic Intelligence newsletter SUBSCRIBER (article)
Saxo Banks John Hardy says:

First we are most likely to see an implementation of tiering of interest rates assessed on bank reserves akin to the Bank of Japans system in an effort to reduce the pain on EU banks affected by negative interest rates on their reserves (particularly an issue for German and French banks).
Second, we will get a rate cut. Rate cuts are so futile I dont understand why the ECB bothers, but that wont stop them from delivering one. Given that Draghi is running out of time and will want to impress, a 20-bps cut might be a bit more likely than the market odds are pricing it at (about 40/60 for 20 vs. 10 bps).
The area where the ECB can surprise most is on the QE front, as renewed QE is clearly controversial on the ECB governing council and where estimates vary from EUR 20B to EUR 60B per month (consensus somewhere in the middle). Beyond these measures, however, it will be important to draw a signal during the press conference on whether Draghi gives the impression that the ECB is shooting its last bullets here or maintains the ability to continue to act. We think not from here the power is in the hands of the EU and its political leadership as the central bank put has almost entirely lost its potency.
10:50AM
Eurozone on track for poor performance in third quarter
Reacting to those eurozone industrial production figures, Pantheon Macroeconomics ClausVistesen writes:

Manufacturing in the Eurozone remained under pressure at the start of Q3, even as the headlines improved slightly from the poor finish to the second quarter. Output of capital and durable consumer goods rebounded from sharp drops in June, but falling production in energy, intermediate and non-durable consumer goods were enough to drive the overall headline down.
Across the major economies, only France stood out to the upside, while output fell on the month elsewhere. It is too soon to make any firm conclusions about Q3 as a whole, but the outlook isnt pretty. Assuming that production will decline 2pc year-over-year through the quarter, which is what the surveys suggest, the quarter-on-quarter rate will dip by 0.2pp, to -0.8%.
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Credit:
Pantheon Macroeconomics
10:23AM
Stocks now looking more mixed...
Those early gains dont appear to have stuck, and the broad picture across Europes top indices nowvery flat, with several bourses trending slightly downwards.
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Credit:
Bloomberg TV
10:13AM
IFO: German will enter technical recession
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

The German manufacturing sector has been struggling

Credit:
INA FASSBENDER/AFP
Germanys IFO Institute think-tank predicts Europes largest economy will slide into a recession this year, predicting its economy will shrink during the third quarter (two consecutive quarters of contraction = technical recession).
IFO reduced its overall German growth forecast for 2019 to 0.5pc, from 0.6pc, saying: While employment in manufacturing has been falling since the spring, the previously strong growth at private service providers and in the construction industry came to a standstill this summer.
German GDP
Timo Wollmershaeuser, IFOs head of forecasting, said:

The German economy is at risk of falling into recession. Like an oil slick, the weakness in industry is gradually spreading to other sectors of the economy, such as logistics, one of the service providers. This outlook is associated with high uncertainties. For example, we are assuming that there will be no hard Brexit or escalation of the US trade war.

He added:

This downturn was triggered by a series of world political events that call into question a global economic order that has grown over decades...Meanwhile, the weakness of the economy has left its mark on the labor market

Adding to the sense of gloom, industrial production across the eurozone slipped 2.0pc year-on-year in July, a worse fall than expected.
Euro area #IndustrialProduction -0.4% in July over June, -2.0% over July 2018 https://t.co/XpWqxOtypr pic.twitter.com/sWhWsxcbfb EU_Eurostat (@EU_Eurostat) September 12, 2019
Apologies for the slight delay in bringing this IFO update to you, I was trying to get hold of an English version.
10:01AM
Full report: Babcock named preferred bidder for frigate contract
My colleague Mason Boycott-Owen has a full report on this mornings announcement that a Babcock-led consortium has won the contract to build a fleet of stripped-down frigates for the Royal Navy. He reports:

In addition to securing jobs for the assembly site atRosyth in Fife, construction work will be spread across the UK up until2027, with work expected to begin this year.
The vessels, which have an averagecostof ?250m each, were commissioned to maintain the Navy's fleet sizeas well as generate money from orders overseas, as the design can be re-sold to other navies.
The cut-price ships are a smaller and cheaper than the Type 26 frigate, which was announced late last year.
Type 26 global combat ship
You can read his full report here:Babcock confirmed as preferred bidder for Type 31 naval frigate
9:57AM
N Brown shares slip after PPI hit
Shares in N Brown, the small-cap plus-size clothing company, have slipped this morning after it announced it will need to set aside up to ?30m for PPi repayments.
PPI | Post-deadline fallout
In an update to the City this morning, it said:

The Group has paid out ?108m in financial redress to date which incorporates the additional provision the Group made of ?22.6m in the second half of the previous financial year to cover claims up to the 29thAugust 2019 deadline.
The Group is currently working through all additional PIRs now received, and although it is not possible to be precise about the final outcome, the Group now believes it will be necessary to make an additional provision in the range of ?20m to ?30m in its half year results for the six months to 31stAugust 2019. As a result, our full year net debt guidance is anticipated to increase from ?440m?460m to ?460m?490m.

The retailer said it will work through the requests it has received and attempt to give firmer figures in its half-year update on October 10.
9:50AM
Morrisons extends deal with Amazon, but reveals second quarter loss
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Morrisons experienced its first quarterly sales fall since 2016

Credit:
Chris Ratcliffe/Bloomberg
Morrisons has postedits first quarterly loss since 2016, but announced its delivery partnership with Amazon Prime has been extended.
Sales rose 5.3pc overall across the six months to June, but the company was weighed down in the second quarter, which saw the first dip after 14 quarters of successive growth amid poor comparatives (2018 was boosted by good weather, the football World Cup and the Royal Wedding).
Dinner dash: The convergence of supermarkets, restaurants and takeaways is gathering pace NOA
The retailer said like-for-like sales would increase in the second half, and said it would swap to a multi-year contract with Amazon Prime rather than rely on the rolling contract it currently uses.
Jefferies analysts said the results confirm a resilient business, saying:

An EBITDA margin increase of 20bps despite challenging industry conditions highlights the considerable self-help available. And a 2p special dividend underlines management confidence on outlook. It also highlights the rewards of ownership, under-appreciated at current levels.

The supermarket is currently the biggest riser on the FTSE 100.
9:32AM
Co-op says it is stockpiling for Brexit, as funeral business revenue drags on results
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

The Co-op is stockpiling some products ahead of Brexit

Credit:
Jon Super/Co-op/PA
The Co-operative Groups half-year profits fell to ?25m in the six months to Junefrom ?44m during the same period last year.
The groups funeral business dragged on earnings, with revenue falling 6pc. The company said this was driven by an unexpected 10pc fall in the death rate and our conscious decision to hold prices in a changing and competitive market.
A history of The Co-op
Chief executive Steve Murrells has been doing the media rounds today, warning over the potential disruption of a no-deal Brexit. He said that the company has been stockpiling goods including toilet paper and water, telling BBC Radio 4s Today programme:

We have taken on extra space. For challenges in fresh areas weve bulked up on some ambient grocery goods. That should put us in good stead.

Concerns about retailer preparedness have been ramped up again, following publication of the Governments Yellowhammer documents, detailing the possible impact of a disorderly Brexit. Heres the document in full if you havent already read it (its only five pages long): Operation Yellowhammer
Operation Yellowhammer | 10 worst case scenarios
Heres more details from the Sunday Times reporter who first obtained a copy of the report last month:
"15. Facing EU tariffs makes petrol exports to the EU uncompetitive. Industry had plans to mitigate the impact on refinery margins and profitability but UK Government policy to set petrol import tariffs at 0% inadvertently undermines these plans." [More to come] Rosamund Urwin (@RosamundUrwin) September 11, 2019
That Co-op Funerals drop may well put pressures on peers in the sector. Peel Hunt analyst Charles Hall cut his target price for rival Dignity to 500p, giving it a sell rating.
9:08AM
Babcock wins order for Type 31 navy frigate
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

Babcock has been named preferred bidder for the competition

Credit:
Babcock
A consortium spearheaded by defence supplier Babcock has won the contract to produce a fleet of cut-price frigates for the Royal Navy.
The announcement, which Telegraph industry editor Alan Tovey reported last month was on its way, secures hundreds of jobs in Fife, with design work set to begin by the end of the year and deliveries set to begin from 2023.
The Arrowhead 140 design was chosen for the ?1.25bn contract.
Babcock boss Archie Bethelsaid:

Driven by innovation and backed by experience and heritage, Arrowhead 140 is a modern warship that will meet the maritime threats of today and tomorrow, with British ingenuity and engineering at its core. It provides a flexible, adaptable platform that delivers value for money and supports the UK's National Shipbuilding Strategy.
Arrowhead 140 will offer the Royal Navy a new class of ship with a proven ability to deliver a range of peacekeeping, humanitarian and warfighting capabilities whilst offering communities and supply chains throughout the UK a wide range of economic and employment opportunities.

The Type 31e is a stripped-down warship, suitable for general duties rather thenintensive warfare, lowering costs to an average ?250m apiece.
Heres more (from last month): Babcock set to build new cut-price frigates and weaken BAE shipbuilding monopoly
Prime Minister Boris Johnson hailed the decision as one that would bring shipbuilding home. He said:

I look forward to the restoration of British influence and excellence across the worlds oceans. I am convinced that by working together we will see a renaissance in this industry which is so much part of our island story
8:56AM
LSE shares hold flat on day after takeover bid
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

The LSE Group received a shock takeover bid from the Hong Kong exchange operator
London Stock Exchange Group shares are pretty much flat this morning, the day after a shock-and-awe bid by the Hong Kong exchange operator to take over the group was unveiled.
Given shares settled fairly below the stated bid price yesterday, it appears HKEX did not to enough in their offer which included a stipulation that LSE give up on its plans to merge with data giant Refinitiv to win over LSE investors.
Read more | Hong Kong stock exchange tables ?30bn bid for the LSE
Heres a comparison of the two exchange groups:
HKEX v LSE - A tale of two stock exchanges
Sunday Telegraph editor Allister Heath said the offer is about weaponising commerce. He writes:

If we do somehow end up leaving the EU, we will need to decide what kind of capitalism and globalisation we wish to nail our colours to. It would be apposite, therefore, were theHong Kong Stock Exchanges stunning ?32 billion hostile takeover bid for the London Stock Exchange to turn out to be an early test of Britains post-Brexit economic policy.
As it happens, I doubt it will ever come to that: the bid is likely to collapse of its own accord. Not only does it undervalue the LSE but two-thirds of the payment would come from printing more Hong Kong Stock Exchange shares. This would tie LSE shareholders into a financial centre in probable terminal decline, thanks toChinas repression and the prospect of never ending turmoil. Its shareholders, if they have any sense, will send the Hong Kongers packing.
You can read his full piece here:Post-Brexit, we need real capitalism not stealth foreign nationalisation
8:45AM
John Lewis warns on Brexit as it slips to half-year loss for first time
Markets seesaw after ECB unveils sweeping stimulus package: as it happened

John Lewis made a ?25.9m loss in the first half

Credit:
TOBY MELVILLE/REUTERS
If a fresh sign of weakness on the UKs struggling high streets, department store John Lewis has slip to a first-half lost for the first time ever. Retail correspondent Laura Onita reports:

John Lewis Partnership made a loss of ?25.9m in the half year to 27 July blaming difficulttrading conditions.
Outgoing Sir Charlie Mayfield said a disorderly Brexit would substantially dent its growth.
We have historically made the majority of our profits in the second half of the year, he said.
Business Briefing Newsletter REFERRAL (Article)
She adds:

Waitrose fared better, making ?110m profits, while the department store chain made a ?61m loss.
Heres Lauras in-depthread on John Lewiss future, from last weekend:
See also:
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