ECB to refrain from tightening policy further this year - HSBC

Fabio Balboni, European Economist at HSBC, do not expects the ECB to tighten policy further this year and to refrain from further tightening.

Key Quotes

“The ECB's most recent bout of TLTRO operations concluded in March, and monthly purchases under QE have slowed to EUR60bn from April until end-2017.”

“We do not expect the ECB to tighten policy further in 2017, tapering QE further or rising interest rates, and no changes to forward guidance until Q4 2017.”

“Financial conditions, however, have already started tightening slightly, with the euro appreciating recently and periphery spreads widening as markets are starting to price in a possible QE tapering.”