[Helmholtz Watson]

ECB interest rates on the main refinancing operations…

[article]869[/article]

[TradersCom]

In a nutshell the ECB announced an end date which should be euro positive hence the spike to 1.1851 but depends on tapering and
interest rates aren’t going up until Summer 2019. Euro flipped and traded down to 1.1619 – a dump of 230 pips quickly – trades 1.1648.

[TradersCom]

June 2018 ECB press conference – Prepared text highlights

Progress toward sustained adjustment of inflation substantial
Longer term inflation expectations well anchored
confident that convergence to TGT will continue
convergence to target will be maintained even after asset purchase program
significant policy stimulus still needed
Support will be provided by net asset persistently in the year

The ECB will remain vigilant and adjust all its instruments as inappropriate to ensure inflation moves toward the government councils target
moderation of growth includes temporary factors, external trade and uncertainty
says growth remains solid and broad-based
the latest economic results are weaker but remain consistent with ongoing and solid economic growth
consumption is supported by ongoing employment gains, and growing household wealth
housing demand remains robust

2018 GDP growth at 2.1% versus 2.4% in March
2019 GDP growth of 1.9% versus 1.9% in March
2020 GDP growth at 1.7% versus 1.7% in March

risk surrounding growth outlook broadly balanced, but uncertainties including threat from global trade and protectionism
headline inflation likely to hoover around current levels for remainder of the year
levels of underlying inflation remain generally muted
ECB expects 2018 inflation at 1.7% versus 1.4% in March
ECB expects 2019 inflation 1.7% versus 1.4% in March
ECB expects 2020 inflation and 1.7% versus 1.7% in March
inflation forecast changes reflect mainly oil prices
broad-based growth calls for rebuilding of fiscal buffers, particularly in countries where government debt remains time

Source ForexLive, ECB

[ThePitBoss]

From The Q&A

Assessment of counsel: doesn’t want to underplay risks
Softer patch 1st seemed to extend into second-quarter in some countries
Sees increasing uncertainty from risks

The soft patches will continue in some countries in Q2
By and large the situation is overall similar and risks remain broadly balance
Increase in geopolitical uncertainty and domestic uncertainty.

Should see progress on growth from fiscal expansion in United States and in medium-term euro zone
Market reaction shows inflation self sustained

The characteristic on policy remains be patient, prudent, and persistent. The decision was unanimous
There’s a desire to keep optionality open
Draghi says asset purchase program is not disappearing. It remains in monetary policy toolbox
Did not discuss tapering options

We should dramatize changes in government policies too much
Italy discussion not meaningful today
Expects rates to remain unchanged to at least the summer of 2019
If through the summer meant September, we would have said September

We have not decided reinvestment yet. It is an important decision. It is not a marginal decision
Reinvestment is one of our main policy tools

The direct effect from trade measure are pretty limited
If there is general retaliation, effect could be more significant
The effect of trade measures and retaliations are also on confidence. Which is hard to measure.

[TradersCom]

Long euro herd – part of it the unwinding and then reestablishing after Italy and back then the Fed wasn’t raising so that Bund/10 year is going to be this wider or wider till Summer 2019

[TradersCom]

ECB Nowotny says ECB is starting exit from expansive monetary policy

Expects ECB to raise rates after summer of 2019
Greece and others can deal with raise rates

[Author]

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