>>> Brokers Upgrades & Downgrades - 14th of January 2015

>>> Up
*AEGON RAISED TO BUY VS NEUTRAL AT CITI
*AG BARR RAISED TO HOLD VS SELL AT SOCGEN
*BIOMERIEUX RAISED TO BUY VS NEUTRAL AT ODDO
*CARLSBERG RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*HAMMERSON RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*ICADE RAISED TO NEUTRAL VS UNDERWEIGHT AT JPMORGAN
*INTU PROPERTIES RAISED TO NEUTRAL VS UNDERWEIGHT AT JPMORGAN
*KLEPIERRE RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*MICHAEL PAGE RAISED TO BUY VS NEUTRAL AT CITI
*PEARSON RAISED TO NEUTRAL VS SELL AT GOLDMAN
*PUBLICIS RAISED TO OVERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*REMY COINTREAU RAISED TO HOLD VS SELL AT SOCGEN, PT EU58
*TEMENOS RAISED TO BUY VS NEUTRAL AT UBS
*TESCO RAISED TO OUTPERFORM VS NEUTRAL AT EXANE
*WOLTERS KLUWER RAISED TO CONVICTION BUY VS SELL AT GOLDMAN

>>> Down
*AGGREKO CUT TO NEUTRAL VS BUY AT CITI
*ALSTRIA OFFICE CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*APR ENERGY CUT TO NEUTRAL VS BUY AT CITI
*BENI STABILI CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*BOOHOO.COM CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*CITYCON CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*COMMERZBANK CUT TO SELL VS NEUTRAL AT GOLDMAN
*CREDIT SUISSE CUT TO NEUTRAL AT HSBC
*DEUTSCHE WOHNEN CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*INTERTEK CUT TO NEUTRAL VS BUY AT CITI
*JCDECAUX CUT TO SELL VS NEUTRAL AT GOLDMAN
*KUONI REISEN CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*METRO CUT TO HOLD VS BUY AT BANKHAUS LAMPE
*NATIONAL GRID CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE
*NN GROUP CUT TO NEUTRAL VS BUY AT CITI
*PATRIZIA IMMOBILEN CUT TO UNDERWEIGHT VS NEUTRAL AT JPMORGAN
*REDEFINE INTERNATIONAL CUT TO UNDERWEIGHT VS NEUTRAL: JPMORGAN
*REED ELSEVIER CUT TO EQUALWEIGHT VS OVERWEIGHT: MORGAN STANLEY
*SEGRO CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*SGS CUT TO NEUTRAL VS BUY AT CITI
*TEMP POWER CUT TO NEUTRAL VS OVERWEIGHT: CITI
*TIC SUBSECTORS CUT TO NEUTRAL VS OVERWEIGHT: CITI
*UNITE GROUP CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN


>>> PT Changes


>>> Initiation
*BOOKER GROUP RATED NEW EQUALWEIGHT AT MORGAN STANLEY, PT 160P
*ELRINGKLINGER RATED NEW NEUTRAL AT JPMORGAN, PT EU25
*HELVETIA RESUMED OUTPERFORM AT CREDIT SUISSE, PT CHF550
*LEONI RATED NEW OVERWEIGHT AT JPMORGAN, PT EU58
*NOKIAN RENKAAT RATED NEW UNDERWEIGHT AT JPMORGAN, PT EU17
*TLG IMMOBILIEN RATED NEW NEUTRAL AT JPMORGAN, PT EU15
*TUI AG RATED NEW OVERWEIGHT AT JPMORGAN, PT 1,365P
*UBM REINSTATED NEUTRAL AT GOLDMAN
*VOPAK RATED NEW BUY AT JEFFERIES, PT EU56
*WIRECARD RATED NEW BUY AT JEFFERIES, PT EU48

>>> Call
>> Stock
*DAILY MAIL EXITS GOLDMAN CONVICTION BUY LIST, STAYS BUY
*DEUTSCHE BANK EXITS UBS LEAST PREFERRED LIST, STAYS NEUTRAL
*SABADELL ADDED TO UBS LEAST PREFERRED LIST
*STANDARD CHARTERED ADDED TO UBS LEAST PREFERRED LIST
*SWEDBANK, BANKIA ADDED TO UBS MOST PREFERRED LIST

>>> Asian Update

Asian Mid-session Update: World Bank cuts global growth outlook again; Copper plummets over 7%


***Economic Data***
- (JP) JAPAN DEC M2 MONEY SUPPLY Y/Y: 3.6% V 3.6%E; M3 MONEY SUPPLY Y/Y: 2.9% V 3.0%E
- (AU) AUSTRALIA SEPT-NOV JOB VACANCIES Q/Q: +2.6% V -0.4% PRIOR
- (NZ) NEW ZEALAND DEC TOTAL CARD SPENDING M/M: -0.3% V -0.4% PRIOR; RETAIL SPENDING M/M: -0.1% V +0.1%E
- (NZ) NEW ZEALAND DEC QV HOUSE PRICES: 4.9% V 5.1% PRIOR (lowest since Aug 2012)
- (KR) SOUTH KOREA DEC UNEMPLOYMENT RATE: 3.5% V 3.4%E
- (KR) SOUTH KOREA NOV MONEY SUPPLY L M/M: 1.2% v 0.8% PRIOR; M2 M/M: 1.4% V 0.8% PRIOR
- (KR) South Korea Dec Bank Lending to Households (KRW): 519.1T v 513.7T prior; 11th consecutive increase and new record high

***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 -1.4%, S&P/ASX -0.7%, Kospi -0.1%, Shanghai Composite +0.4%, Hang Seng +0.2%, Mar S&P500 -0.3% at 2,009

***Commodities/Fixed Income***
- Feb gold -0.5% at $1,227, Feb crude oil -0.6% at $45.60/brl, Mar Copper -5.0% at $2.49/lb
- (US) API PETROLEUM INVENTORIES: CRUDE: +3.9M v +0.5Me, GASOLINE: +1.6M v +2.5Me, DISTILLATE: +0.42M v +1Me
- JGB: (JP) Japan MoF sells ¥643B in 1.5% (1.5% prior) 30-yr notes; Avg yield: 1.123% v 1.456% prior; Bid to cover: 3.57x v 3.12x prior
- (AU) Australia MoF (AOFM) sells A$700M in 3.25% 2029 Bonds; avg yield: 2.8567%; bid-to-cover: 2.42x

***Market Focal Points/Key Themes/FX***
- Midday reversal to the downside in the US session has translated into a mixed session Asia, where Nikkei225 and Sydney are falling while Shanghai and Composite are holding on to modest gains. Report out of the World Bank estimated 2014 GDP growing by 2.6%, up from 2.5% in 2013 but below 2.8% forecast made in June. WB also lowered 2015 GDP target to 3.0% from 3.4% and 2016 target to 3.3% from 3.5%, adding that risks to slow recovery are tilted to downside, and also warning global trade may weaken further if euro area or Japan slip into recession. On China, WB noted growth is expected to slow below 7% by 2017 from 7.4% in 2014, also cutting 2015 China forecast to 7.1% from 7.5% and 2016 to 7.0% from 7.4%. US GDP for 2015 was raised to 3.2% from 3.0% and 2016 affirmed at 3.0%.

- While equity indices were mixed, trading in commodities has been decidedly bearish. Copper prices are particularly volatile, plunging some 7% in electronic trade to $2.42/lb. A research note out of Goldman Sachs also saw risks to copper heavily skewed to downside, anticipating continued demand weakness in China. Australian metal names reflected the selloff, with Fortescue down over 8% and more modest declines in Rio Tinto and BHP of around 3%. AUD is also weighed down by plunging metals - AUD/USD was down nearly 100pips below $0.81, while AUD/JPY hit 2 1/2 month lows below ¥95.

- In other USD majors, USD/JPY has largely tracked the risk-off tone established in the US session, falling by 60pips to 117.30. A Nikkei report speculated the BOJ may revise its FY15/16 CPI target to lower 1% range due to falling oil prices when it meets on Jan 21st and announces updated CPI and GDP targets. EUR/USD traded in a 20pip range just shy of $1.1780 going into the European Court of Justice Final opinion on ECB's OMT program later in the London session.

- Hong Kong chief CY Leung delivered his 2015 Policy Address, stressing the need to improve economy to offer youth upward mobility, improve employment, and also consider land development in new territories to address the high property prices.

***Equities***
US markets:
- XON: Enters Exclusive CAR T Pact with Ziopharm with MD Anderson; +7.0% afterhours
- GME: Reports holiday season results; SSS -3.1%; reiterates guidance; +6.5% afterhours
- FCE.A: To convert to a REIT, continue to pursue strategic plan initiatives; +6.3% afterhours
- OCN: Cooperating With California Dept. of Business Oversight; +5.0% afterhours
- LLTC: Reports Q2 $0.51 v $0.49e, R$352.6M v $359Me; Raises quarterly dividend 11% to $0.30/shr, implied yield 2.7%; +4.8% afterhours
- CSX: Reports Q4 $0.49 v $0.49e, R$3.19B v $3.18Be; +0.6% afterhours
- CTAS: Authorizes additional share repurchases up to $500M (5.5% of market cap); +0.6% afterhours

- CZR: Asks judge to halt potential bankruptcy of a division, as creditors attempt to force the division into bankruptcy - press; -1.0% afterhours
- TSLA: CEO: Sales in China fell significantly in Q4; May step down as CEO after launch of Model 3 - comments at auto show in Detroit; -6.1% afterhours
- DWCH: Guides Q1 Net loss $4.5-4.6M, Rev $6.9-7M v $10.1Me; -27.7% afterhours

Notable movers by sector:
- Consumer Discretionary: Wuxi Little Swan 000418.CN +3.0% (FY14 guidance); Bic Camera 3048.JP +4.3% (Q1 results); Pal Co 2726.JP +3.3% (9-month results)
- Consumer staples: Create SD Holdings 3148.JP +5.0% (H1 results); Cosmos Pharmaceutical 3349.JP +6.4% (H1 results)
- Financials: China Galaxy Securities 6881.HK +1.4% (Dec Op result); China Overseas Land 688.HK +4.6% (Dec sales result); Yuexiu Property 123.HK +1.9% (Dec sales result)
- Materials: Jiangxi Wannianqing Cement 000789.CN +1.4% (prelim FY14 results); PanAust PAN.AU -9.0% (to cut workforce); Syrah Resources SYR.AU +3.6% (provides update on battery anode); St Barbara SBM.AU +1.8% (Q2 gold production); Northern Star Resources NST.AU +1.9% (quarterly sales result)

>>> US After Hours Summary: ZLTQ +7.4%, GME +6.5%, CSX +1.0%, DWCH -25

After Hours Summary: ZLTQ +7.4%, GME +6.5%, CSX +1.0%, DWCH -25.9%, PRGS -10.0%, SYK -1.4% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: NEPT +11.1%, ZLTQ +7.4%, CERE +7.1%, GME +6.5%, DRWI +4.9%, LLTC +4.7%, CSX +1.0%

Companies trading higher in after hours in reaction to news: ZIOP +26.7% (co and partner Intrexon (XON) announced licensing agreement with The University of Texas MD Anderson Cancer Center; XON +7.0%), NEPT +11.1% (co and its subsidiary NeuroBioPharm announced agreement which will result in the indirect acquisition by Neptune of all the issued and outstanding shares of NeuroBio; co also reported earnings), OCN +5.9% (co announced it is fully cooperating with the California Department of Business Oversight (DBO) to resolve an administrative action dated October 3, 2014), DEJ +5.1% (announced Dejour B-100 Woodrush oil well swab tests at 400 BOPD)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: DWCH -25.9%, PRGS -10.0%, QTM -6.9%, AAOI -2.0%, SYK -1.4%

Companies trading lower in after hours in reaction to news: TSLA -7.4% (WSJ reporting CEO Elon Musk said China sales weakened due to 'misperceptions' among Chinese consumers about charging), CCJ -3.6% (announced that 0.34 mln pounds of uranium concentrate was produced from milling Cigar Lake ore in 2014, in line with its most recent expectations), NEWM -2.8% (announced public offering of 7 mln shares of common stock), FCE.A -2.4% (co's Board of Directors has approved a plan for the company to pursue conversion to REIT status), ERII -1.6% (Thomas S. Rooney, Jr. will be resigning as CEO), CUDA -1.5% (filed for $100 mln mixed securities shelf offering; also filed for offering of ~5.49 mln shares of common stock by selling stockholders) 

>>> US Close Dow-0,15% S&P-0,26% Nasdaq-0,07% Russell+0,05%

Closing Market Summary: S&P 500 Unable to Hold 50-Day Average

The stock market enjoyed broad-based support at the start of the Tuesday session, but the opposite was true when the session ended. The S&P 500 lost 0.3% with eight sectors settling in the red.

The final standing masks the fact that the benchmark index was up in excess of 1.0% at the start of the day. The S&P 500 spent the first 90 minutes near its high, but the absence of intraday buying interest opened the door to a retreat that accelerated when the S&P cut through its 50-day moving average (2046/2047).

Commodity-related sectors fueled the pullback from highs with energy (-0.7%) and materials (-1.2%) ending the day at the bottom of the barrel. The two groups struggled to keep pace with the market in the early going and their underperformance became more notable during the afternoon retreat. Alcoa (AA 15.80, -0.37) ended lower by 2.3% despite reporting better than expected results for the quarter. Commodities, meanwhile, endured another rough day. Copper fell 4.6% to $2.60/lb while crude oil settled lower by 0.3% at $45.92/bbl after hitting an overnight low under the $44.50/bbl level.

Like energy and materials, the remaining cyclical sectors came unglued during the afternoon, but the discretionary sector (-0.1%) was able to end ahead of the S&P 500 even as homebuilders cratered. This morning, KB Home (KBH 13.87, -2.70) rallied in reaction to its revenue beat on earnings that included a deferred tax asset valuation allowance; however, the stock plunged to its October low after management said during its post-earnings conference call that the company does not expect to hit its margin goal in 2015. Instead, first-quarter margins are expected to show a significant year-over-year decline. The news sent shares of KBH lower by 16.3% while the iShares Dow Jones US Home Construction ETF (ITB 25.99, -0.68) fell 2.6% as investors adjusted their expectations for the growth-sensitive industry.

Elsewhere, the technology sector (-0.1%) spent the day ahead of the broader market with Apple (AAPL 110.16, +0.91) contributing to the relative strength. The largest sector component jumped 0.8% after Credit Suisse upgraded the stock to ‘Outperform' from ‘Neutral.' Other large cap sector members ended mixed with Google (GOOGL 501.80, +4.74) climbing 1.0% and Microsoft (MSFT 46.36, -0.25) falling 0.5%.

The technology sector helped the Nasdaq Composite (-0.1%) finish the day a bit ahead of the broader market. Similarly, biotechnology stocks outperformed with the iShares Nasdaq Biotechnology ETF (IBB 314.97, -0.09) ending little changed, but the health care sector (-0.5%) settled among the laggards.

Treasuries registered modest gains with the 10-yr yield slipping one basis point to 1.90%.

Today's participation was ahead of average with more than 850 million shares changing hands at the NYSE floor.

Economic data was limited to JOLTs and Treasury Budget:
  • The Job Openings and Labor Turnover Survey showed that openings increased to 4.972 million from 4.830 million in November 
  • The Treasury Budget for December showed a surplus of $1.90 billion, which followed the prior surplus of $53.20 billion 
    • The consensus expected the surplus to hit $3.00 billion 
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while December Retail Sales (consensus 0.1%) and December Import/Export Prices will cross the wires at 8:30 ET. The Business Inventories report for November (consensus 0.3%) will be reported at 10:00 ET while the Fed's January Beige Book will be released at 14:00 ET.
  • Dow Jones Industrial Average -1.2% YTD 
  • Nasdaq Composite -1.6% YTD 
  • S&P 500 -1.7% YTD 
  • Russell 2000 -2.0% YTD

WSJ : German Banks Warned About Risky Bets Amid Low Rates

German Banks Warned About Risky Bets Amid Low Rates
Lenders Should Raise Fees, Trim Branch Networks to Lift Profits, Regulator Says

FRANKFURT —The current low-interest-rate environment is the greatest challenge for German banks and could push some into making risky investments, a senior German banking regulator said Tuesday.

Cutting costs and merging “can help” but aren’t a complete solution, Elke Koenig, head of Germany’s banking watchdog BaFin, said. Ms. Koenig added that banks need to focus on rationalizing their branch networks and raise fees to levels that better reflect costs. She acknowledged that charging higher fees might be hard because Germany’s banking market is extremely competitive.

German banks are struggling to boost profits amid rising regulatory costs, weak economic conditions across much of Europe and record-low interest rates, which reduce banks’ income.

Interest income accounts for 70% of German banks’ profits, which is high by European standards and has been hit by falling interest rates. Reliance on interest income is the main reason for German banks’ low profitability, Ms. Koenig said.

WSJ : Adidas to Sign Up to 500 Athletes for Endorsements

Adidas to Sign Up to 500 Athletes for Endorsements
Sports-Clothes Maker Trying to Regain Market Share Lost to Under Armour, Nike

Adidas AG plans to sharply ramp up endorsement deals with U.S. pro football and baseball players in the next few years, as the German sportswear maker tries to gain traction in the American market.

The company’s U.S. arm has the go-ahead to sign as many as 250 National Football League players and 250 Major League Baseball players over the next three years, up from a total of fewer than 40 now, Adidas North American President Mark King said in an interview Tuesday.

Adidas said it also recently inked deals with both the NFL and MLB that will allow the players it endorses to sport the company’s three-stripe logos on the equipment they wear on the field.

Adidas has fallen into third place in the U.S. sportswear market behind Under Armour Inc. and has dropped even farther behind market leader Nike Inc.

In the 11 months ended Jan. 3 Adidas held a 4.6% share of the U.S. market in retail apparel and 7.1% in footwear, the latter including Reebok, which has its own sponsorships, according to data from Sterne Agee and SportScanInfo. The company posted declines in both categories from a year earlier period. Nike and Under Armour, which together control roughly 46% of the apparel and 62% of the U.S. retail footwear markets, each posted gains over the same period.

Adidas is a leader in soccer but hasn’t done a good job of associating itself with traditional American sports like football, basketball and baseball. The company’s executives have been slow to deviate from that soccer-first strategy until just recently.

“We can’t use the global strategy,” said Mr. King, who took the helm as the company’s North America president in June after running its TaylorMade golf division. “I know we’re a soccer brand globally, but in the U.S. we have to be about U.S. sport. We can still be No. 1 in soccer, but that can’t be what drives our business.”

Sports endorsements are a costly but arguably necessary step to cementing brands in the minds of American shoppers, and it’s an area where Adidas has lagged behind rivals. The market is hotly competitive. Under Armour recently scooped up British tennis champion Andy Murray , who previously wore Adidas as part of the Baltimore-based company’s push to gain influence abroad. Last summer, Nike won a tough bidding war with Under Armour over NBA MVP Kevin Durant.

It still isn’t clear how or when these endorsements directly translate into retail sales. “It’s not a visceral kind of thing where you run an ad and you get a response, it’s a long-term brand building idea. But in terms of impact, I think it’s meaningful,” said Matt Powell, a sports industry analyst for NPD Group.

Current Adidas-sponsored football players include Washington Redskins quarterback Robert Griffin III and Dallas Cowboys running back DeMarco Murray. Its present MLB baseball roster includes Philadelphia Phillies second baseman Chase Utley and brothers B.J. and Justin Upton, who play for the Atlanta Braves and San Diego Padres, respectively.

Der Standard - "Not even allow deflation" Ewald Nowotny (google translation)

"Not even allow deflation" Ewald Nowotny / Link {http://bit.ly/1wUKYts}

The fears of deflation are not exaggerated, says OeNB boss Ewald Nowotny. The ECB must act now

Default: If the current price drop already a reason for the European Central Bank (ECB) to take action?

Ewald Nowotny: No. Monetary policy actions should be based on medium-term prospects. Monthly results are not decisive. But the latest figures were a further indication that inflation perspective is significantly lower in the euro area is currently under the objectives of the ECB. And that's a problem.

Default: Why?

Nowotny: We were the ECB's primary objective of maintaining price stability. Achieved is by our definition with an inflation rate of not more than, but almost two percent. Too low inflation is the danger of slipping into deflation. The two-percent mark is to ensure that we have the buffer. The problem for a central bank is always that inflation can fight much easier than deflation. At extremely rising prices have to put up interest rates. Although this leads to a recession, but inflation can fight each other. Deflation must be countered with lower interest rates. But a central bank can total lending rate at which banks can take their loans, do not make negative. The scope of the central bank is here so much more limited. That is why it is so important not only allow deflation.

Standard: What makes a deflation so dangerous?

Nowotny: A decrease of unit prices may be positive. A drop in price across the whole economy is problematic as it may lead to so that the sales are decreasing in an economy. Declining sales affect investment behavior and press the income development. In addition, deflation specifically means that the real burden of debt and the real interest rate increase, which in turn suppresses the growth.

Standard: Your Exkollege, the German economist Juergen Stark, is of the opinion in Europe deflation paranoia will stoked. Japan it was in the past 15 years not fared badly, despite a mild deflation.

Nowotny: I do not believe that such a development as in Japan, so a long-term stagnation, a useful perspective for Europe would be. In Japan, the low growth has not been reflected in massively higher unemployment. Because in Japan falls by the demographic development, labor supply, and the country has a closed labor market . In Europe, this is completely different: Here, a stage of a long stagnation to a massive increase in unemployment would lead to what we see now, unfortunately. With all the massive social and political effects.

Standard: Can the ECB do something about the threat of deflation?

Nowotny: monetary policy alone is a weak lever, but a necessary, though not sufficient, condition for economic recovery. What that means is I think it's a good idea to make something of monetary policy. In contrast to the other major central banks to the ECB balance sheet shrinks currently, because banks pay back their loans to us tend to. If the central bank thus does nothing, this would amount to a de facto monetary tightening same. We should at least achieve neutral effects.

Standard: Discussed is currently the purchase of government bonds by the European Central Bank. This is intended long-term interest rates down and lending in Europe are encouraged. Would such an action in your opinion useful?

Nowotny: In order to make monetary policy more neutral as mentioned, there are several possibilities. One is new lending programs for banks. Such a program we launched in the autumn of 2014 it was recorded but comparatively weak. Another possibility is that the ECB buys active market securities. For some programs have also been started. The third step would be to expanding this program to purchase other assets, so for example on corporate bonds and government bonds. This moves the current debate in the ECB.

Standard: A critique of the plan is that if the ECB buys Greek and Italian government bonds, it operates States financing. So she takes the pressure for reform of the crisis countries.

Nowotny: The purchase of government bonds is a traditional instrument of central bank policy. To avoid the dangers of direct government financing, the purchase of the corresponding secondary markets would take place, we would not directly purchase from the States. It is controversial to what extent the ECB shall make such purchases and who bears the risk. This can be a shared risk with the ECB. But this can also be a risk borne by the individual banks themselves. But this discussion is still ongoing.

Default: If the ECB says she wants to ensure that inflation in the euro area as a whole is increasing, not everyone will benefit. In Austria inflation is at 1.7 percent. For Austria it's absurd to be active.

Nowotny: We are in Austria safely in a slightly different location. The inflation rate is higher, unemployment is lower than the average of the euro area. The monetary policy must clearly apply to the entire euro area. But there is a strong interdependence between all Member States. It is also for Austria that exports to countries who are stuck in stagnation, are declining.

Standard: Is there not a risk that inflation climbs in Austria by possible ECB intervention via the two-percent mark?

Nowotny: The development in Austria is caused by special effects. Partly due to fee increases, partially offset by a stronger inflation in services. I do not think we have long to expect a higher rate of inflation. On the contrary, the forecasts assume that the inflation rate back in 2015.

Standard: Where exactly is the point in trying to push lending rates even more? In Austria, companies already record-low interest rates on loans. In Spain and Italy the conditions are per se not so bad. Many economists say the real problem is the lack of demand for credit.

Nowotny: Of course, the really important point is the demand side. Where there are different aspects of it. Large companies have currently probably no problems with financing. It is different from most small- and medium range. The ECB measures must also be seen in nexus with the plan of EU Commission President Jean-Claude Juncker to stimulate investment. (The Juncker Plan builds on this by initiating public spending, private investment. If we are to succeed, interested entrepreneurs have come to cheap loans, note.)

Standard: Germany rejects the government bond purchases. How great is the danger of division in the ECB?

Nowotny: Everyone has an interest that a common procedure possible results of the ECB. This applies to both ECB President Mario Draghi and for President Jens Weidmann of the German Bundesbank. That's why the talks are still.

Standard: Convert already next week with a decision.

Nowotny. I personally believe that it would be useful to come sooner rather than later to a decision. There are all sorts of speculation in the markets, and I believe that a central bank should as soon as possible to give clarity on their strategy. (Szi, THE STANDARD, 01/14/2014)

Ewald Nowotny Governor of the Austrian National Bank and a member of the Governing Council of the ECB interest rate policy committee.