ECB: Abrupt dovish shift - Westpac
|Simon Murray, economist at Westpac, explains that the March ECB policy meeting marked a significant dovish shift in the policy stance as in March they have factored in weakness persisting through the first half of 2019.
Key Quotes
“All up, this saw large downward revisions in the economic projections, the extension of interest rate policy forward guidance to rates expected to be on hold at least through the end of 2019 (previously summer of 2019), and the announcement of a new Targeted Long-Term Refinancing Operations (TLTRO) package in response to the upcoming maturities.”
“New loans through TLTRO-III will start in September 2019 and end in March 2021. As with the upcoming maturing TLTRO-II, they will allow banks to borrow up to 30% of their stock of eligible loans, and will have built-in incentives to encourage banks to lend to households and businesses.”
“A major difference for TLTRO-III is that it will be for a shorter maturity of two years compared to the TLTRO-II of four years which Draghi says relates to the change in conditions (TLTRO-II was made in 2016).”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.