Financial Times’ tweet error on ECB rate causes market confusion
Some 10 minutes before the much-awaited decision, the British newspaper published an article claiming the central bank would leave rates unchanged. At the same time it sent out a tweet from its account @FTMarkets reading “ECB leaves rates unchanged in shock decision”.business Updated: Dec 04, 2015 18:07 IST
The Financial Times caused a stir on financial markets Thursday after erroneously reporting that the European Central Bank was to leave interest rates unchanged, minutes before the ECB actually cut a key rate.
Some 10 minutes before the much-awaited decision, the British newspaper published an article claiming the central bank would leave rates unchanged.
At the same time it sent out a tweet from its account @FTMarkets reading “ECB leaves rates unchanged in shock decision”.
Most analysts had been expecting the ECB to relax its monetary policy further, and the indication it would hold back caused a rush to buy the euro.
Within a few minutes, the currency went from its lowest level in seven months of $1.0542 to above $1.06.
Gains in European equity markets were wiped out in minutes and eurozone bond yields rose.
Both the tweet and the corresponding article were deleted in minutes, but not before they had been picked up by news organisations such as Bloomberg, a service closely watched by financial professionals.
There was time for transactions worth billions of dollars to go through before the correction, as seconds count in a market that sees trades worth $5.3 trillion a day on average.
When the ECB published its decision at 12:45 GMT as scheduled it announced that it would indeed lower one of its key interest rates in the hope of boosting economic activity and stimulating low levels of inflation in the euro zone.
It cut the deposit rate to a historic low of minus 0.3%-- an announcement that initially sent the euro tumbling.
But the euro subsequently rebounded to almost $1.09, with analysts saying they had been expecting a stronger move by the ECB, and a more aggressive stance on its programme to buy in eurozone assets, known as quantitative easing.
Analysts said the incident had caused confusion on the markets.
“The Financial Times tweet, sent in error, that said the ECB was going to keep rates unchanged, interfered with the market,” said Christopher Dembik, analyst at Saxo Bank.
James Hughes, chief market analyst at online broker GKFX, said: “The mix up caused the euro to rally and left the markets confused as to what was to come next”.
The Financial Times explained what had happened.
“The article was one of two pre-written stories -- covering different possible decisions -- which had been prepared in advance of the announcement,” the newspaper wrote.
“Due to an editing error it was published when it should not have been. Automated feeds meant that the initial error was compounded by being simultaneously published on Twitter.”
“The FT deeply regrets this serious mistake and will immediately be reviewing its publication and workflow processes to ensure such an error cannot happen again,” it added.
The 127-year-old newspaper has a reputation for accuracy and has developed a strong online presence that relays information in real time and is active on social networks.
According to an estimate by the Financial Times Group, its newspaper has a total circulation of 750,000, including 550,000 digital subscribers.
Based in London, the Financial Times this week officially came under the ownership of Japan’s Nikkei financial information firm which bought it for £844 million ($1.27 billion, 1.2 billion euros) from British publisher Pearson.