ECB Leaves Rates Unchanged As Expected Sees Rates Unchanged To End of 2019

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    Helmholtz Watson

    ECB interest rates on the main refinancing operations…


    Helmholtz Watson

    Draghi Opening statement

    Risks to the eurozone still tilted to the downside
    ECB will consider if negative rates need mitigating
    Inflation likely to decline in coming months
    Underlying inflation to increase over medium term
    Underlying inflation continues to be muted
    Ample degree of stimulus needed

    Employment gains and wages underpin economy
    Incoming data continue to be weak, especially in manufacturing
    Effect of temporary factors to unwind
    Uncertainties relating to geopolitics, protectionism, emerging markets leaving mark on sentiment
    Some domestic factors dampening growth are starting to fade

    Helmholtz Watson

    Draghi Q&A:

    It’s too early to decide on tiered negative rates
    Tiering needs further analysis
    We have been closely looking at the decline in inflation expectations
    Markets are expecting less upward pressure on the labor market
    Negative risk premium is the predominant reason that market-based inflation expectations are falling
    We have plenty of instruments
    We remain fully committed to return inflation to 2% without delay

    We didn’t discuss the TLTRO deal, we haven’t discussed the merits or the cons of them
    The outlook is a picture of weakening growth
    He was asked about buying equities and didn’t rule it out
    We didn’t discuss guidance
    Inflation will probably bottom in September
    Risk of a eurozone recession remain low
    If you are to introduce mitigating measures for banks, would this imply low rates for longer? We haven’t discussed that

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