15 Apr 2015
JP Morgan: Will Draghi confirm a further dovish bias? – eFXnews
FXStreet (Barcelona) - The eFXnews Team notes JP Morgan views that in today’s press conference Draghi might not only assure the markets for full QE implementation but also remind about ECB’s bias to extend purchases beyond September 2016.
Key Quotes
“No policy changes are expected at this week's ECB policy meeting and Draghi will continue to be satisfied with the greaterthanexpected traction QE is getting in financial markets and express a “prudent optimism” about the macro outlook.”
“He will be encouraged by the pickup in bank lending growth as a sign that QE will be transmitted from markets to the real economy, and argue that signaling effects may already be working. But, he will stress the “prudent” aspect to this optimism by dismissing suggestions that the ECB may need to taper its purchases before September 2016. In particular, he will emphasize that the staff forecast assumes full QE implementation and that risks to the staff projections are still on the downside (even though betterthananticipated QE traction has reduced these risks). This is probably best illustrated by the uncertainty the Governing Council saw around the 2017 inflation forecast in the Accounts of the March meeting.”
“Draghi will also give a reminder that the ECB’s current bias is to make purchases beyond September 2016, rather than to taper before then. In our view, the hurdle for the ECB to taper its purchases before September 2016 is very high.”
This content has been provided under specific arrangement with eFXnews.
Key Quotes
“No policy changes are expected at this week's ECB policy meeting and Draghi will continue to be satisfied with the greaterthanexpected traction QE is getting in financial markets and express a “prudent optimism” about the macro outlook.”
“He will be encouraged by the pickup in bank lending growth as a sign that QE will be transmitted from markets to the real economy, and argue that signaling effects may already be working. But, he will stress the “prudent” aspect to this optimism by dismissing suggestions that the ECB may need to taper its purchases before September 2016. In particular, he will emphasize that the staff forecast assumes full QE implementation and that risks to the staff projections are still on the downside (even though betterthananticipated QE traction has reduced these risks). This is probably best illustrated by the uncertainty the Governing Council saw around the 2017 inflation forecast in the Accounts of the March meeting.”
“Draghi will also give a reminder that the ECB’s current bias is to make purchases beyond September 2016, rather than to taper before then. In our view, the hurdle for the ECB to taper its purchases before September 2016 is very high.”
This content has been provided under specific arrangement with eFXnews.