ECB Leaves Rates Unchanged As Expected, QE Contingent on Incoming Data

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  • #18692
    Helmholtz Watson
    Participant

    ECB interest rates on the main refinancing operations…

    [article]1139[/article]

    #18693
    TradersCom
    Keymaster

    ECB Draghi Prepared Text for Presser

    Highlights:

    Repeats ECB Policy Statement in the opening remarks
    incoming data has been weaker than expected
    protectionism, emerging, financial markets remain prominent
    significant stimulus is still needed for inflation over the medium-term
    net asset purchases will continue until the end of the year

    Economic analysis:
    data consistent with baseline scenario
    stimulus continues to underpin domestic demand
    private consumption is fostered by employment growth and rising wages
    business investment is supported by solid domestic demand, financial conditions and corporate profitability
    expansion in global activities expected to continue and support exports
    Cites risks related to protectionism, emerging markets, financial turmoil as risk
    domestic cost pressures are strengthening, broadening
    underlying inflation to pick up toward end of year
    inflation to increase over medium-term supported by expansionary policy, economic growth
    loan growth supported by increasing demand
    urges governments to raise long-term growth potential and reducing vulnerabilities
    reform implementation must be stepped up substantially
    broad-based growth calls for rebuilding fiscal offers. important in countries where government debt is high

    Highlights via ForexLive

    #18703
    Helmholtz Watson
    Participant

    EURUSD continues to be sold off after ECB

    New low 1.1358 under previous supports of 1.1376 and 1.1365 which was the swing high of August 2016 at 1.13658. Watch for the weekly close as 200 week ma of 1.1314 and band between 1.1282-1.1311.

    From a failure POV that 1.1376 breakdown is the spit level.

    #18725
    TradersCom
    Keymaster

    [b]ECB Draghi:
    [/b]
    Central banks should not be subject to physical or political dominance and should be free to choose the instruments that are most appropriate to deliver its mandate

    We are witnessing major demographic and technological changes, but these do not necessarily imply that structural factors are the main drivers of inflation
    if central banks were less independent, it would eventually de-anchor inflation expectations

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