Economists had expected a modest 0.1 percent decline.
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Bullard’s comments come on a day when numerous Federal Reserve members are scheduled, particularly NY Fed President William Dudley.
Lower oil prices Draghi explained has been a factor in low inflation, and the delay in the effects of the generally stronger exchange rates for the euro, while produce prices have remained subdued. The overall decline would also be at a much slower pace than past year, signalling a few improvement in sentiment.
“What we’ve seen in the data leading up to this is very low-end industrial production, and missed expectations, and weak factory orders, so any kind of suggestion that this is a result of infiltrated weakness coming from emerging markets will release expectations that Draghi will act”, said Eimear Daly, a currency strategist at Standard Chartered.
Draghi said the bank would re-examine the degree of monetary policy accommodation in place at the ECB’s December meeting, adding to expectations it could cut euro deposit rates and expand or extend its programme of bond-buying.
Germany, the region’s powerhouse economy saw its growth dip to 0.3 percent from 0.4 percent.
The Stoxx Europe 600 was down 0.3% midmorning after a few downbeat corporate…
The dollar edged up to 122.90 yen against its Japanese counterpart, below this week’s 2-1/2-month high of 123.60, while the euro added about 0.1 percent to US$1.0755, recovering from this week’s almost seven-month low of US$1.0674. Oil was down again Thursday, with United States crude dropping more than 1% to $42.43 a barrel, and Brent crude slipping to $45.33 a barrel, off by 1%.
In an address to the European Parliament, Draghi said inflation dynamics had somewhat weakened and that a “sustained normalisation” of inflation could take longer to achieve than thought. More deflationary pressure is expected, as stellar news on U.S. employment strengthens the argument for an interest rate rise in the US. The pan-European FTSEuroFirst 300 was down 1.4% at 1,487 points. Today’s figures for euro-zone GDP in the third quarter suggest that the council will do more to enhance activity and to revive inflation rather than less.
Meanwhile the spread, or difference in yield, between 10-year higher-yielding Spanish and lower-yielding Italian government bonds continued to widen, to 24.6 bps from 23.3 bps, as concerns about the calls for Catalan independence from Spain grew louder. The S&P/ASX 200 index eked out a 0.1 percent gain, helped by the jobs report’s upside surprise.
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Despite a series of tail-winds, the 19-country eurozone grew by only 0.3 percent in the July-September period from the previous quarter.
