ECB: Council seems ready to change its guiadance but not in January - Rabobank
|According to analysts from Rabobank, European Central Bank officials have clearly been sending the message that the Governing Council is considering changes to the guidance in the near-term, but they think January is too early and expect hints for the March meeting.
Key Quotes:
“Back in October we noted our disappointment with the fact that the Governing Council hadn’t taken a more decisive step towards ending the asset purchase programme, including the decision to leave the ECB’s forward guidance intact rather than disconnecting the asset purchases from the central bank’s inflation outlook. However, the Council now seems ready to change its guidance shortly.”
“We would expect the Governing Council to remove the downward bias and in fact change the focus of its forward guidance to its broader policy stance. However, ECB sources have leaked that the Council is unlikely to make these changes at Thursday’s meeting already. We believe March is a more likely date, as the ECB will also have fresh staff forecasts to back up that decision and it may want to use the next week’s meeting to actually temper expectations somewhat.”
“ECB sources have leaked that the Council is unlikely to make these changes at Thursday’s meeting already. We believe March is a more likely date, as the ECB will also have fresh staff forecasts to back up that decision and it may want to use the next week’s meeting to actually temper expectations somewhat.”
“We would expect President Draghi to reiterate the increased optimism amongst the Council members, whilst potentially also adding that they are ‘rethinking’ their forward guidance, without making any final commitments to the market. That is, Mr. Draghi will pave the way for actual changes in March, provided that economic conditions remain positive and provided that the Governing Council continues to see signs of improving inflationary momentum.”
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