seen as indicating a favourable assessment of the recent monetary policy decisions of the eurosystem, signalling that financial market participants expect the environment of price stability to continue. in this connection, i could mention the fall in long - term interest rates in the last couple of days to new historical lows and also the downward shift of the yield curve. no major news has come in on the outlook for the euro area economy since we last met. hence, we continue to face uncertainties originating from the evolution of the world economy in 1999, which are reflected in a weakening of industrial confidence in the euro area over recent months. also, euro area real gdp growth in the third quarter weakened when compared with the first half of 1998. on the other hand, consumer confidence remained high until late 1998. this mixed picture is also reflected in other indicators. order books and capacity utilisation point to a less optimistic outlook, while retail sales and the recent pattern in employment and unemployment suggest more favourable trends. in general, this pattern of mixed evidence appears to characterise the economic situation in the euro area around the turn of the year and we shall continue to carefully monitor developments. with respect to the latest data on the harmonised index of consumer prices, the annual increase for november 1998 showed a further slowdown to 0. 9 %, compared with 1. 0 % in the two previous months. this development was in line with previous trends, i. e. it was mainly due to lower annual percentage changes in the prices of food and a further reduction in energy prices. on balance, the general environment continues to suggest that there is no significant upward or downward pressure on prices in the short term. the pattern of risks to price stability has remained broadly unchanged. on the one hand, downward pressures could materialise if import or producer prices were to fall further, while, on the other, wage developments would become a matter of concern if wage increases were higher than expected. in addition, any relaxation of fiscal policies would negatively affect the price climate as well as the credibility of the stability and growth pact. in conclusion, taking into account the latest evidence available, the governing council has not altered its assessment regarding the outlook for price developments. this is why, as i already mentioned, the governing council decided that for the two forthcoming main refinancing operations the same conditions will apply as for the first one, i. e. they will be fixed rate tenders conducted at an interest rate of 3. 0 %. we also

benoit cœure : the international dimension of the european central bank ’ s asset purchase programme - an update speech by mr benoit cœure, member of the executive board of the european central bank, at a conference on " exiting unconventional monetary policies ", organised by the euro 50 group, the cf40 forum and cigi, paris, 26 october 2018. * * * it was more than 30 years ago, in october 1987, when the spread between the yield on ten - year us treasuries and their german equivalents last reached current levels. such stark divergences in monetary policy cycles are often followed by abrupt reversals in cross - border capital flows. purchases of us securities by private non - residents, for instance, accelerated strongly in 1988 and 1989. much of the inflow went into us treasuries, partly due to attractive bond yield differentials. but when returns on german bunds caught up with those of us treasuries in 1990, the situation was turned on its head. in less than 12 months, private non - residents went from being net buyers of us securities to net sellers. 1 in recent years, the united states has once again become a destination for large capital inflows. between 2014 and 2017, purchases of us securities by non - residents roughly tripled. and in the first half of this year, private foreign investors were still important net buyers of us securities. i have provided evidence in the past that the unconventional monetary policy measures adopted by the ecb since 2014 have led to sizeable capital outflows from the euro area that have contributed to the inflows into the united states. 2 with the ecb ’ s net asset purchases nearing their end – the governing council yesterday reaffirmed its anticipation that net purchases will end after december – concerns have been voiced that cross - border capital flows may once again rise to become a source of market volatility, with uncertain effects on global asset prices. in my remarks today i will argue that such fears are largely unfounded. i will present evidence that suggests that the stock effect of central bank asset purchase programmes, together with increased transparency around our reaction function, has helped mitigate abrupt changes in international asset allocation in recent years. and i will argue that recent changes to our forward guidance, together with sizeable future reinvestments from maturing securities under our asset purchase programme ( app ), will also in the future reduce the likelihood of sudden and adverse spillover and spill