According to Carsten Brzeski, chief economist at ING, the ECB is concerned is probably the main message from the just-released minutes of the July meeting.
“In its discussion on both the outlook for eurozone growth and inflation, the ECB’s assessment had become more pessimistic. As regards growth, the minutes say that it “was also considered that these downside risks had become more pervasive and that their persistence could ultimately also necessitate a revision to the baseline growth scenario”. Looking at inflation, the recent declines in both actual inflation and longer-term inflation expectations were “a matter of concern”.”
“The official views and tone presented during the press conference in July were just a normal consequence of the discussion. The minutes do not say anything about how close the ECB is to actually act but reading between the lines, the July meeting was probably as close as it can get without actually acting.”
“Interestingly, the minutes also suggest that there is a majority at the ECB in favour of a package of new measures, rather than a series of single measures. A “combination of instruments with significant complementarities and synergies, since experience had shown that a policy package – such as the combination of rate cuts and asset purchases – was more effective than a sequence of selective actions”.”
“Looking ahead, the “relevant committees” are still preparing different options for the Governing Council meeting on 12 September.”
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.