ECB: Greater willingness to ease policy – Westpac
Westpac analysts point out that the July ECB meeting met expectations by indicating that the deposit rate is likely to be cut very soon and that other stimulus measures are on the table.
Key Quotes
“Concern over still low inflation and a new affirmation on the symmetry of their inflation target — suggest an even greater willingness to ease policy. In that context, the Governing council “have tasked the relevant Eurosystem Committees with examining options” ranging from reinforced forward guidance, a tiered reserves system and new asset purchases.”
“Since July, ECB member Rehn called for a "significant and impactful" package to address concerns over the outlook. Against that, the more hawkish members voiced their opinion that the economy is not weak enough to restart QE.”
“We expect a deposit rate cut at the September meeting and a commitment to restart asset purchases - in our view, sovereign bond purchases of €40bn per month.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
