Market news

LONDON (Reuters) – Prime Minister Theresa May puts a stripped-down version of her twice-defeated Brexit divorce deal to a vote in parliament on Friday in an attempt to break the impasse over the United Kingdom’s exit from the European Union.

The vote, on the day the country was originally due to exit the European Union, illustrates the depth of the three-year Brexit crisis that has left it uncertain how, when or even if the United Kingdom will ever leave.

Lawmakers will vote at about 1430 GMT on May’s 585-page EU Withdrawal Agreement at a special sitting, but not on the 26-page Political Declaration on future relations, a maneuver to get around a ban on repeatedly putting the same submission to a vote.

“It is in fact really the last chance we have to vote for Brexit as we understood it,” said Liam Fox, May’s Brexit-supporting trade minister.

Fox said there was a fear among Brexit supporters in parliament that the divorce from the bloc could be thwarted, a step he said would open “a chasm of mistrust” between voters and political leaders.

To win the vote, May must bring on side dozens of Brexit-supporting lawmakers in her own party and more than 20 Labour Party lawmakers.

Speaker John Bercow said parliament would not vote on any amendments but Attorney General Geoffrey Cox suggested the government would have accepted a proposal by Labour lawmaker Gareth Snell to increase the power of parliament over the second stage of talks.

However, the Democratic Unionist Party, which props up May’s minority government, said it would not change its mind and its 10 MPs would vote against the deal.

As May tries to salvage her deal and some lawmakers try to grab control of the process, thousands of Brexit supporters are due to protest in central London with a “Brexit Betrayal” march led by campaigner Nigel Farage which ends outside parliament.

Amid the chaos, May agreed with the EU to delay Brexit from the originally planned March 29 until April 12, with a further delay until May 22 on offer if May could get her divorce package ratified by lawmakers this week.

The pound fell toward a three-week low of $1.3004.

LAST CHANCE?
May on Wednesday pledged to quit if her deal was passed but even that failed to immediately win over many Brexit supporters in her party. They say her deal leaves the United Kingdom tied far too closely to the EU.

If the government wins the vote, it believes it will have satisfied the conditions set by the EU in order to delay Britain’s exit from the bloc until May 22.

However, the result will not meet the criteria in British law for the exit package to be formally ratified.

The uncertainty around Brexit, the United Kingdom’s most significant political and economic move since World War Two, has left allies and investors aghast.

The 2016 referendum revealed a United Kingdom divided over much more than EU membership, and has provoked impassioned debate about everything from secession and immigration to capitalism, empire and what it means to be British.

Opponents fear Brexit will make Britain poorer and divide the West as it grapples with both the unconventional U.S. presidency of Donald Trump and growing assertiveness from Russia and China.

Supporters of Brexit say while the divorce might bring some short-term instability, in the longer term it will allow the United Kingdom to thrive if cut free from what they cast as a doomed attempt in European unity.

“Westminster has betrayed the greatest democratic vote in the history of our country, and we won’t let them get away with it,” Farage said, calling on Brexit supporters to gather outside parliament.

Far-right activists such as Tommy Robinson are due to speak at a separate meeting being cast as “a make Brexit happen” rally. Hundreds of thousands of people opposed to Brexit marched through London on Saturday.

BEIJING (Reuters) – U.S. Treasury Secretary Steven Mnuchin said on Friday he had a “productive working dinner” the previous night in Beijing, kicking off a day of talks aimed at resolving the bitter trade dispute between the world’s two largest economies.

Mnuchin and U.S. Trade Representative Robert Lighthizer were in the Chinese capital for the first face-to-face meetings between the two sides in weeks after missing an initial end-of-March goal for a summit between U.S. President Donald Trump and Chinese President Xi Jinping to sign a pact.

“We had a very productive working dinner last night, and we are looking forward to meeting today,” Mnuchin said as he left his hotel to meet with Chinese Vice Premier Liu He, who is due to visit Washington next week to continue the talks.

Mnuchin did not elaborate and it was not immediately clear with whom he had dined on Thursday night.

Trump imposed tariffs on $250 billion of Chinese imports last year in a move to force China to change the way it does business with the rest of the world and to pry open more of China’s economy to U.S. companies.

On Thursday, Chinese Premier Li Keqiang said Beijing will sharply expand market access for foreign banks and securities and insurance companies, adding to speculation that China may soon announce new rules to allow foreign financial firms to increase their presence at home.

White House economic adviser Larry Kudlow said the United States may drop some tariffs if a trade deal is reached while keeping others in place to ensure Beijing’s compliance.

“We’re not going to give up our leverage,” he told reporters in Washington on Thursday.

Mnuchin and Lighthizer greeted a waiting Liu at the Diaoyutai State Guest House just before 9 a.m. (0100) on Friday for what China’s Commerce Ministry has said would be a full day of talks.

Among Trump’s demands are for Beijing to end practices that Washington alleges result in the systematic theft of U.S. intellectual property and the forced transfer of American technology to Chinese companies.

U.S. companies say they are often pressured into handing over technological know-how to Chinese joint venture partners, local officials or regulators as a condition for doing business in China.

The U.S. government says that technology is often subsequently transferred to and used by Chinese competitors.

The issue has proved a tough one for negotiators as U.S. officials say China has previously refused to acknowledge the problem exists to the extent alleged by the United States, making discussing a resolution difficult.

China says it has no technology transfer requirements enshrined in its laws and any such transfers are a result of legitimate transactions.

WASHINGTON (Reuters) – The U.S. Supreme Court on Thursday handed President Donald Trump a victory by rejecting for the second time in three days a bid by gun rights activists to block his new ban on “bump stock” attachments that enable semi-automatic weapons to fire rapidly.

The policy, embraced by Trump in the wake of an October 2017 massacre in Las Vegas in which bump stocks were used, went into effect on Tuesday. The ban is a rare recent instance of gun control at the federal level in a country that has experienced a succession of mass shootings.

The court in a brief order refused to grant a temporary stay sought by the group Gun Owners of America and others in a lawsuit filed in Michigan challenging the ban while litigation continues. Chief Justice John Roberts on Tuesday rejected a similar bid to block the policy in a separate legal challenge brought in Washington by individual gun owners and gun rights groups including the Firearms Policy Foundation and Florida Carry Inc.

Michael Hammond, Gun Owners of America’s legislative counsel, said many owners of the estimated 500,000 bump stocks in the United States would refuse to turn them in despite the ban and related criminal penalties. People caught in possession of bump stocks could face up to 10 years in prison under the policy.

“GOA will continue to fight the issue in the court system, as the case now returns to the lower courts. We remain convinced that the courts will consign this unlawful, unconstitutional ban to the trash bin of history, where it belongs,” Hammond said in a statement, using the group’s acronym.

A Justice Department spokeswoman said the administration was pleased with the high court’s action.

Bump stocks use a gun’s recoil to bump its trigger, enabling a semiautomatic weapon to fire hundreds of rounds per minute, which can transform it into a machine gun. The Justice Department’s regulation followed the lead of many states and retailers that imposed stricter limits on sales of guns and accessories after a deadly shooting at a Florida high school in February 2018.

LAS VEGAS SHOOTING
Trump pledged to ban bump stocks soon after a gunman used them in a spree that killed 58 people at a country music festival in Las Vegas. The Justice Department on Dec. 18 announced plans to implement the policy on March 26.

The FBI said in January it had found no clear motive for the 64-year-old Las Vegas gunman, Stephen Paddock, in the deadliest mass shooting in modern U.S. history.

In the Michigan case, a federal judge already has ruled in favor of the administration. The Cincinnati, Ohio-based 6th U.S. Circuit Court of Appeals refused to put the ban on hold pending appeal. Other plaintiffs in that case include the Gun Owners Foundation, the Virginia Citizens Defense League and three individual gun owners.

In the Washington case, a federal judge also upheld the ban, prompting the gun rights advocates to appeal to the U.S. Court of Appeals for the District of Columbia Circuit. That court has heard oral arguments but has not yet ruled.

Those challenging the policy have argued that the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) lacks the authority to equate bump stocks with machine guns. One of the laws at the center of the legal dispute was written more than 80 years ago, when Congress restricted access to machine guns during the heyday of American gangsters’ use of “tommy guns.”

Trump’s fellow Republicans typically oppose gun control measures and favor of a broad interpretation of the right to bear arms promised in the U.S. Constitution’s Second Amendment. In 2017, there were 39,773 gun deaths in the United States, according to the most recent U.S. Centers for Disease Control and Prevention figures released in December.

MOSCOW (Reuters) – Members of the Russian military have arrived in Venezuela but will not take part in military operations, Venezuela’s military attache in Moscow was cited as saying by Interfax news agency on Thursday.

A spokeswoman for the Russian foreign ministry subsequently said Russia had sent a team of specialists to Venezuela discuss military cooperation at the request of the government in Caracas.

U.S. President Donald Trump called on Russia on Wednesday to pull troops out of Venezuela and said “all options” were open to make that happen. Two Russian air force planes landed outside Caracas on Saturday carrying nearly 100 Russian troops, according to media reports. Russia had until now declined to comment on the reports.

“The presence of Russian servicemen in Venezuela is linked to the discussion of cooperation in the military-technical sphere,” Jose Rafael Torrealba Perez said, according to Interfax.

Russian foreign ministry spokeswoman Maria Zakharova said at her weekly news briefing on Thursday that “Russia is not changing the balance of power in the region, Russia is not threatening anyone, unlike citizens (officials) in Washington.”

“Russian specialists have arrived in Venezuela in line with the provisions of a bilateral inter-government agreement on military-technical cooperation. No one canceled this document,” she said.

In Venezuela’s recent political crisis, Russia and China have backed President Nicolas Maduro, while the United States and most other Western countries support opposition leader Juan Guaido. In January, Guaido invoked the constitution to assume Venezuela’s interim presidency, arguing that Maduro’s 2018 re-election was illegitimate.

UNITED NATIONS (Reuters) – The United States was isolated at the United Nations Security Council on Wednesday over President Donald Trump’s decision to recognize Israel’s sovereignty over the Golan Heights as the other countries on the council opposed the move.

In a letter requesting Wednesday’s meeting, Syria described the U.S. decision as a “flagrant violation” of council resolutions, while ally North Korea issued a statement backing “the struggle of the Syrian government and people for taking back the occupied Golan Heights.”

Israel captured the Golan Heights from Syria in the 1967 Middle East war and annexed it in 1981 in a move the 15-member U.N. Security Council declared “null and void and without international legal effect.”

British U.N. Ambassador Karen Pierce told the council that the U.S. decision was in contravention of that 1981 resolution, while Russia’s Deputy U.N. Ambassador Vladimir Safronkov said Washington had violated U.N. resolutions and warned it could fuel instability in the Middle East.

The European members of the council – France, Britain, Germany, Belgium and Poland – on Tuesday also raised concerns about “broader consequences of recognizing illegal annexation and also about the broader regional consequences.”

Trump, with Israeli Prime Minister Benjamin Netanyahu looking over his shoulder during a visit to Washington, on Monday signed a proclamation officially granting U.S. recognition of the Golan Heights as Israeli territory.

Germany’s U.N. Ambassador Christoph Heusgen described the Syrian letter as “deeply cynical.”

“The Syrian government has over the past eight years grossly violated the international laws of war and is responsible for grave war crimes and crimes against humanity,” he said, referring to the long-running Syrian civil war.

U.S. Secretary of State Mike Pompeo said earlier on Wednesday that Washington’s decision would help resolve the Israeli-Palestinian conflict by removing uncertainty.

Saudi Arabia, the United Arab Emirates, Bahrain, Qatar and Kuwait on Tuesday criticized the U.S. decision on the Golan Heights and said the territory was occupied Arab land. Iran echoed the comments.

The Security Council deployed a peacekeeping force in 1974 – known as the U.N. Disengagement Observer Force (UNDOF) – to monitor a ceasefire between Syria and Israel in the Golan Heights. There are more than 880 U.N. troops on the ground.

U.S. diplomat Rodney Hunter told the council that the U.S. decision on the Golan Heights does not affect the truce or undermine the deployment of the peacekeeping mission.

“UNDOF continues to have a vital role to play in preserving stability between Israel and Syria, most importantly by ensuring that the Area of Separation is a buffer zone free from any military presence or activities,” he told the council.

SEATTLE/WASHINGTON (Reuters) – Boeing Co on Wednesday took its most aggressive moves yet to defend its core 737 airliner franchise, saying it had developed software fixes to prevent failures of an automated flight control system that is being scrutinized after two deadly crashes in the past five months.

Boeing, in the midst of one its worst crises in years, is under pressure from crash victims’ families, airlines, lawmakers in Washington and regulators around the world to prove that the automated flight control systems aboard its 737 MAX aircraft are safe, and that pilots have the training required to override the system in an emergency.

A Boeing official in Seattle said on Wednesday the timing of the software upgrade was “100 percent independent of the timing of the Ethiopian accident,” and the company was taking steps to make the anti-stall system “more robust.”

There was no need to overhaul Boeing’s regulatory relationship with the U.S. Federal Aviation Administration (FAA) now, the company said.

“We are going to do everything that we can do to ensure that accidents like these never happen again,” Mike Sinnett, Vice President for Product Strategy and Future Airplane Development told reporters.

The FAA said it had not reviewed or certified the software upgrade yet.

U.S. Transportation Secretary Elaine Chao and some lawmakers on Wednesday questioned why Boeing did not require safety features on its top-selling plane that might have prevented the crashes.

“It is very questionable if these were safety-oriented additions, why they were not part of the required template of measures that should go into an airplane,” she said, adding she was not ready to require that all safety options be retrofitted on existing airplane.

A spokesman for the FAA said the agency had not reviewed or certified the software upgrade yet.

Executives with U.S. airlines welcomed Boeing’s moves, but want U.S. regulators to sign off on the upgrade.

Southwest Airlines Co, which on Wednesday became the first major airline to formally cut its financial outlook for the year after being forced to pull its MAX fleet of 34 jets out of service, supported Boeing’s decision.

“Boeing’s software update appears to add yet another layer of safety to the operation of the MAX aircraft,” Southwest’s certificate chief pilot Bob Waltz said.

Allied Pilots Association, which represents American Airlines Group Inc pilots, said it was pleased with Boeing’s progress but warned the certification process should not be rushed. The fix should be fully vetted and take into account any further information from an investigation into an Ethiopian Airlines crash on March 10, the association said in a statement.

United Airlines vice president Michael Quiello said the airline was optimistic about the software update, but was counting on the FAA to certify the change.

Airline stocks turned positive after Boeing unveiled the software fix. CFRA analyst Jim Corridore, who has a “buy” rating on Boeing, said news from the company and the Washington hearing were positive steps toward getting the MAX jets airborne again.

EXTRA COMPUTER TRAINING
The world’s largest planemaker said the anti-stall system, which is believed to have repeatedly forced the nose lower in at least one of the accidents, in Indonesia last October, would only do so one time after sensing a problem, giving pilots more control.

It will also be disabled if two airflow sensors that measure the “angle of attack,” or angle of the wing to the airflow, a fundamental parameter of flight, offer widely different readings, Boeing said. Reuters reported those details earlier this week.

The anti-stall system – known as MCAS, or Maneuvering Characteristics Augmentation System – has been pinpointed by investigators as a possible cause in a fatal Lion Air crash in Indonesia and the one in Ethiopia.

Existing 737 pilots will also have extra computer-based training following criticism that MCAS was not described in the aircraft manual.

Boeing has previously said existing cockpit procedures would cover any example of runaway controls caused by MCAS.

The changes were drawn up in response to the Lion Air crash but are seen as crucial to regaining the trust of pilots, passengers and regulators after the Ethiopia crash prompted a worldwide grounding of Boeing 737 MAX planes.

Ethiopian officials and some analysts have said the Ethiopian Airlines jet behaved in a similar pattern before crashing shortly after take-off from Addis Ababa, but that investigation is still at an early stage.

Boeing’s Sinnett said the software had been through extensive testing, including flights with the FAA. However, he said he could provide no timeframe for when the 737 MAX jets would return to service.

Boeing said it would change the design of the system so that it no longer relied on a single sensor. The changes also would make standard visual warnings to the pilots if the system had stopped working. Previously, those warning messages and displays had been optional.

Reuters reported in November after the Lion Air disaster that some aviation experts believed the optional alert could have alerted engineers about mechanical faults, leading to an industry debate over whether the system should be mandatory.

Current 737 MAX pilots have criticized Boeing for not disclosing more details about MCAS initially. Sinnett said the company has added details on MCAS to its flight crew operations manual. All pilots will need to complete this training before returning to the skies, he said.

John Hamilton, chief engineer for 737 Max flight displays, said in a statement that “all primary flight information required to safely and efficiently operate the 737 MAX” was already included without the features that would now be offered.

WASHINGTON (Reuters) – China has made unprecedented proposals in talks with the United States on a range of issues including forced technology transfer as the two sides work to overcome remaining obstacles to a deal to end their protracted trade war, U.S. officials told Reuters on Wednesday.

U.S. President Donald Trump imposed tariffs on $250 billion of Chinese imports last year in a move to force China to change the way it does business with the rest of the world and to pry open more of China’s economy to U.S. companies.

Among Trump’s demands are for Beijing to end practices that Washington alleges result in the systematic theft of U.S. intellectual property and the forced transfer of American technology to Chinese companies.

China put proposals on the table in the talks that went further than in the past, including on technology transfer, said one of four senior U.S. administration officials who spoke to Reuters.

Negotiators have made progress on the details of the written agreements that have been hashed out to address U.S. concerns, he said.

“If you looked at the texts a month ago compared to today, we have moved forward in all areas. We aren’t yet where we want to be,” the official said, speaking on condition of anonymity.

“They’re talking about forced technology transfer in a way that they’ve never wanted to talk about before – both in terms of scope and specifics,” he said, referring to Chinese negotiators. He declined to give further detail.

Reuters reported previously that the two sides were working on written agreements in six areas: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin arrive in Beijing on Thursday for a new round of talks with Chinese officials to work on a deal that would end a months-long trade war that has cost both sides billions of dollars and hurt global economic growth.

The in-person talks, which will be followed by a round in Washington next week, are the first face-to-face meetings the two sides have held in weeks after missing an initial end-of-March goal for a summit between U.S. President Donald Trump and Chinese President Xi Jinping to sign a pact.

Talks would continue as long as progress is being made on the core issues, the official said.

“It could go to May, June, no one knows. It could happen in April, we don’t know,” another administration official said.

The two sides still have differences over intellectual property and how to enforce a deal, he said.

‘SOME TARIFFS WILL STAY’
China wants the United States to lift its tariffs as part of a deal. Washington, which is cognizant that the tariffs give it leverage to ensure Beijing follows through on any commitments it makes, is wary of lifting them right away.

Trump said last week the United States may leave tariffs on Chinese goods for a “substantial period” to ensure compliance.

“Some tariffs will stay,” the second official said. “There’s going to be some give on that, but we’re not going to get rid of all the tariffs. We can’t.”

The topic will be addressed in upcoming talks.

“Obviously that is an issue that we need to resolve … and will be an important part of a final deal,” the first official said. He said there was some agreement on enforcement on what he termed the “backend” once a deal was in place: a structure in which both sides could raise grievances and implement tariffs if there were violations to the agreement.

Since July 2018, the United States has imposed duties on $250 billion worth of Chinese imports, including $50 billion in technology and industrial goods at 25 percent and $200 billion in other products including furniture and construction materials, at 10 percent.

China has hit back with tariffs on about $110 billion worth of U.S. goods, including soybeans and other commodities.

The first official said the focus of talks had shifted from Chinese purchases of U.S. goods to the trickier structural issues, which he said Trump wanted as part of a “great” deal.

Bipartisan support at home for his tough stance on China as well as from the business community have emboldened Trump as he pushes for a deal that addresses long-standing complaints on trade, the source said.

Some officials have expressed concern that Trump would accept a deal involving big-ticket Chinese purchases of U.S. goods and falling short on structural issues.

“Who would he be pleasing by .. selling out?” the source said.

He expressed optimism that a deal would be reached.

“I’m still confident, but it takes time,” he said.

“Until any deal is finalized, it can always go either way. And the president has made clear, both in word and in action, that he’s going to walk away from deals if they’re not good deals.”

LONDON (Reuters) – British Prime Minister Theresa May is expected on Wednesday to indicate a date for quitting as the price for getting her twice-defeated Brexit deal ratified, while parliament tries to select its own alternative from a multiple-choice list of options.

As the United Kingdom’s three-year Brexit crisis spins towards its finale, it is still uncertain how, when or even if it will leave the European Union, though May hopes to bring her deal back to parliament later this week.

With British politics at fever pitch, lawmakers on Wednesday grab control to have so-called indicative votes on Brexit, with 16 options ranging from a much closer post-exit alignment with the EU to leaving without a deal or revoking the divorce papers.

Just two days before the United Kingdom had been originally due to leave the EU on March 29, some of the most influential Brexit-supporting rebels, such as Jacob Rees-Mogg, have reluctantly fallen in behind May’s deal.

The price for May may be her job.

She is expected to indicate a date for her departure at a showdown with Conservative Party lawmakers at a meeting of the 1922 Committee in Westminster at around 1700 GMT.

Before that, lawmakers start a debate on what sort of EU divorce the world’s fifth largest economy should go for. They will vote at 1900 GMT on a ballot paper for as many proposals as they wish. Results will be announced after 2100 GMT.

“The prime minister might get a deal over the line on Thursday or Friday,” said Oliver Letwin, a Conservative former cabinet minister who has led parliament’s unusual power grab. “If she does, no one would be happier than I am.”

“If, however, that doesn’t happen and if we do go forward to Monday, and if on Monday one or more propositions get a majority backing in the House of Commons, then we will have to work with the government to get the government to implement them.”

The uncertainty around Brexit, the United Kingdom’s most significant political and economic move since World War Two, has left allies and investors aghast.

The head of the European Council Donald Tusk urged the European Parliament to be open to a long Brexit extension and not to ignore the British people who wanted to remain in the EU.

“You cannot betray the six million people who signed the petition to revoke Article 50, the one million people who marched for a People’s Vote, or the increasing majority of people who want to remain in the European Union,” said Tusk, who chairs summits of EU leaders.

Britons voted 52-48 percent to leave the EU in the 2016 referendum.

Voters appeared to be changing their minds about leaving the EU, polling expert John Curtice said on Tuesday, but not to a degree that would make a different result in another referendum a safe bet.

BREXIT FINALE?
Opponents fear Brexit will divide the West as it grapples with both the unconventional U.S. presidency of Donald Trump and growing assertiveness from Russia and China.

Supporters say while the divorce might bring some short-term instability, in the longer term it will allow the United Kingdom to thrive if cut free from what they cast as a doomed experiment in European unity.

May’s deal, an attempt to soothe the divide of the 2016 referendum by leaving the formal structures of the EU while preserving close economic and security ties, was defeated in parliament by 149 votes on March 12 and by 230 votes on Jan. 15.

It is unclear if parliament’s attempt to find an alternative will produce a majority. House of Commons Speaker John Bercow will select which of the proposals will be put to a vote.

Among the 16 options that could be voted on are a public vote on a deal, an enhanced Norway-style deal and Labour’s plan for a customs union and close alignment with the Single Market.

Brexit supporters fear the entire divorce is at risk. The government could try to ignore the votes, though if May’s deal fails then an election could be the only way to avoid parliament’s alternative proposal.

She still hopes to get her deal, struck with the EU in November after more than two years of negotiation, approved.

BREXIT DEAL?
To succeed, May needs at least 75 lawmakers to come over – dozens of rebels in her Conservative Party, some opposition Labour Party lawmakers and the Northern Irish Democratic Unionist Party (DUP), which props up her minority government.

The Sun newspaper said Graham Brady, chairman of the 1922 Committee, told May the party’s lawmakers want her to set out a timetable to quit before the summer.

As Brexit supporters came behind her deal, it was unclear how the DUP would vote.

“I am now willing to support it if the Democratic Unionist Party does,” Rees-Mogg wrote in the Daily Mail. Boris Johnson, who led the Brexit campaign, indicated he could come behind the deal if May gave an exit date.

If May does not get the deal approved this week, London will have until April 12 to offer a new plan or decide to leave without a treaty. If she can get it approved this week, a departure date of May 22 will apply.

European Commission President Jean-Claude Juncker said it was unclear how Brexit would unfold.

“If you compare Great Britain to a sphinx then the sphinx would seem to me an open book. We will see in the course of this week how this book will speak,” he said.

FRANKFURT (Reuters) – The European Central Bank is willing to further delay a planned interest rate hike if necessary and may look at measures to mitigate any side effects of negative interest rates, ECB President Mario Draghi said on Wednesday.

Reversing course earlier this month amid an unexpected slowdown, the ECB has put plans to ‘normalize’ policy on hold, providing banks with even more liquidity and delaying a rate hike from record lows until next year.

“Just as we did at our March meeting, we would ensure that monetary policy continues to accompany the economy by adjusting our rate forward guidance to reflect the new inflation outlook,” Draghi told a conference in Frankfurt.

Draghi added that conditions for its new bank loan facility, called targeted longer-term refinancing operations or TLTRO, will also be calibrated to reflect evolving economic conditions.

Although Draghi said the economic soft patch does not necessarily foreshadow a serious slump, the euro area was now experiencing a more persistent deterioration of external demand, which seems to be dragging down investment.

Addressing complaints from banks that negative rates are hurting bank lending, Draghi said the ECB would look at whether mitigating measures are needed but said that negative weak profits are not an automatic result of low rates.

“If necessary, we need to reflect on possible measures that can preserve the favorable implications of negative rates for the economy, while mitigating the side effects, if any,” Draghi said. “That said, low bank profitability is not an inevitable consequence of negative rates.”