Trichet

• MODEST JULY INTEREST RATE INCREASE WAS JUSTIFIED
• MUST REMAIN ATTENTIVE TO ALL FACTS AND FIGURES
• ECONOMIC RISKS ARE TILTED TO THE DOWNSIDE
• COMMENTS THAT OIL PRICE DECLINE IS DISINFLATIONARY BUT ALSO STIMULATIVE
• RATE CUTS FAR FROM BEING FULLY PASSED TO ECONOMY
• ECB ALWAYS DOES WHAT'S NEEDED TO ANCHOR EXPECTATIONS
• ECB IS NEVER PRE-COMMITTED ON INTEREST RATES

 The comments have given the EURUSD a touch of a bid.

• REAL ECONOMY IS SLOWING DOWN
• PMI DATA NOT A SURPRISE
• ASKS BANKS TO SPEED UP PROCESS
• ALL MEASURES MUST BE TAKEN INTO ACCOUNT BY BANKS
• ECB DOING ALL IT CAN TO IMPROVE CONFIDENCE
• WHAT WE NEED IS CONFIDENCE
• ENVIRONMENT HAS CHANGED DRAMATICALLY

•  INFLATION TO BE IN LINE WITH STABILITY IN 2009
•  INFLATION EXPECTED TO CONTINUE DECLINING
•  OUTLOOK FOR PRICE STABILITY HAS IMPROVED
•  TURMOIL TO DAMP DEMAND FOR PROTRACTED PERIOD
•  PRICE STABILITY IN COURSE OF 2009
• MONEY GROWTH REMAINS STRONG
• PRICE, WAGE PRESSURES SHOULD MODERATE
•  MONEY GROWTH SHOWS SIGNS OF SLOWING
•  FURTHER DECLINE IN INFLATION RISKS
•  SOCIAL PARTNERS MUST LIVE UP TO RESPONSIBILITIES
•  LEVEL OF UNCERTAINTY REMAINS VERY HIGH
•  EXCEPTIONAL CHALLENGES LIE AHEAD
•  ECB WILL CONTINUE TO ANCHOR PRICE EXPECTATIONS
•  WORLD ECONOMY FEELING ADVERSE EFFECTS OF CRISIS
•  TENSIONS FROM TURMOIL SPILLING OVER TO ECONOMY
•  MUST MAINTAIN DISCIPLINE IN POLICY MAKING
•  CRUCIAL TO LAY SOUND FOUNDATIONS FOR RECOVERY
• EURO-15 ECONOMIC M0MENTUM WEAKENED SIGNIFICANTLY
•  BANKS MUST TAKE ALL MEASURES INTO ACCOUNT
• MUST AVOID SECOND-ROUND EFFECTS
• SOME DOWNSIDE RISKS TO GROWTH HAVE MATERIALISED
• INFLATION HAS BEEN STEADILY DECLINING
• INFLATION ABOVE STABILITY LEVEL SINCE LAST AUTUMN
• HIGH INFLATION DUE TO
  

• VERY INTENSE INTERNATIONAL COOPERATION IN PLACE
• THERE ARE LIMITS TO WHAT WE CAN DO
• ALL AUTHORITIES NEED TO TAKE RESPONSIBILITY
• ECB DOING EVERYTHING IT CAN TO ENSURE LIQUIDITY
• ALL EUROPEAN GOVTS NEED TO AGREE ON PRINCIPLES
• ECB CAN'T HELP WITH SOLVENCY PROBLEMS
• CALLS FOR UNITY IN INTERNATIONAL RESPONSE TO CRISIS
•  GREATER TRANSPARENCY NEEDED AT INSTITUTIONS, MKTS
•  LACK OF TRANSPARENCY CAUSE OF CONTAGION
• EUROPEAN UNITY KEY TO CONFIDENCE
• ECB ASSURES MID-TERM PRICE STABILITY
• ATTEMPTS BEING MADE TO BOOST CONFIDENCE
•  WARNS AGAINST SEEKING FOREX SCAPEGOATS IN CRISIS

The problem with Trichet and ECB is they are still obsessed with inflation.  The delay will hurt the economy and raise unemployment (which is already high in comparison to other nations). In addition, there are nations within the Eurozone which are showing extreme weakness. 

•  RECENT DATA CLEARLY SHOW WEAKENING ECONOMY
• TURMOIL COMPLICATES ASSESSEMENT OF NEAR TERM
•  IMPERATIVE TO AVOID BROAD-BASED 2ND-ROUND EFFECTS
•  M3, CREDIT GROWTH SHOW SIGNS OF MODERATION
•  INFLATION RISKS STILL EXIST
• UPSIDE RISKS TO PRICE STABILITY HAVE DIMINISHED
•  RECENT DATA CONFIRM GROWTH WEAKENING
•  ECB STRESSES, MUST KEEP EXPECTATIONS ANCHORED
•  DISCUSSED IMPACT OF TURMOIL ON INFLATION
•  ECB DISCUSSED INTENSIFICATION OF MARKET TURMOIL
• EXTRAORDINARY HIGH DEGREE OF UNCERTAINTY
• ECB WILL MONITOR DEVELOPMENTS `VERY CLOSELY'
• ECB DETERMINED TO SECURE PRICE STABILITY
• DECLINE VS DOLLAR; TRICHET SAYS GROWTH WEAKENING
• WAGE GROWTH IS PICKING UP
• RISKS INCLUDE MARKET TENS
  

Highlights from ECB President Trichet:

ECB Trichet: price stability  remains a primary focus and is very important for stability of financial markets- Adds that there is a need to remain alert
- ECB aims to deliver price stability and will combat inflationary expectations
- Sees ongoing market correction, will be on extraordinary high alert.
Has no comment on Lehman Brothers
- Price stability remains the prerequisite
- Will remain faithful to its inflation mandate

2:00 AM EDT, ECB’s Trichet speaks at a conference in Nice, Italy

Highlights from Trichet:

ECB TRICHET: ECONOMIC UNCERTAINTY HAS DECLINED IN PAST 25 YEARS AND RISK AVERSION MAY RESURFACE
- Correction of prior market excesses are welcomed, even though they may be painful
- Strong monetary policy is needed
- Reiterates that price stability is necessary

ECB TRICHET SAYS THAT IT IS UNCLEAR IF INVERTED OIL FUTURES CURVE IS DUE TO RISK PREMUIM OR SPOT PRICE OUTLOOK

• TROUGH IN GROWTH IN 2ND AND 3RD QUARTER. PROGRESSIVE RECOVERY AFTER  
• 2ND ROUND EFFECTS WOULD HURT EMPLOYMENT
• WATCHING WAGE TALKS 
• SEES GRADUAL RECOVERY FOLLOWING WEAK EPISODE
• INFLATION ONLY MODERATING GRADUALLY
• WAGE GROWTH PICKING UP
• INFLATION RANGE 3.4-3.6 FOR 2008 
• ECONOMY IS IN EPISODE OF WEAK ACTIVITY
• DOWNSIDE RISKS TO GROWTH PREVAIL
• SAY ECB WILL MONITOR DEVELOPMENTS CLOSELY
• SEES HIGH INFLATION
• CURRENT RATES WILL HELP ACHIEVE ECB'S OBJECTIVE
• ECB DETERMINED'TO ANCHOR PRICE EXPECTATIONS
• PRICE STABILITY IS ECB'S PRIMARY OBJECTIVE
• IMPERATIVE TO AVOID 2ND-ROUND EFFECTS
• LATEST DATA SHOW WEAKENING GROWTH
• MONEY GROWTH POINTS TO MID-TERM INFLATION RISK