ECB: Weakness has spread, while inflation remains a concern – ABN AMRO

Analysts at ABN AMRO notes that ECB President Christine Lagarde struck a dovish tone in remarks at a hearing of the Committee on Economic and Monetary Affairs of the European Parliament.

Key Quotes

“She noted that the outlook for the global economy remained ‘sluggish and uncertain’ and that this was weighing on investment and exports, with the manufacturing sector slowing the most due to these developments. At the same time, she noted that the weakness was spreading saying that the Governing Council was ‘seeing signs of spillovers to other parts of the economy, with recent survey data pointing to some moderation in the services sector’.”

“The weakness in the economy had ‘been affecting price developments, which remain subdued’ and she added that ‘inflation expectations are at or close to historical lows’. Against this background she talked up the effectiveness of the ECB’s tools saying that ‘monetary policy can respond effectively even when growth is being dampened by external factors’. She asserted the ECB remained ‘resolute in its commitment to deliver on its mandate’ and added that ‘monetary policy will continue to support the economy and respond to future risks in line with our price stability mandate’.”

“We think her comments are consistent with our view that the ECB will announce a second stimulus package in the coming months (most likely in March of next year).”

“Finally, the ECB President hinted that the review could take a while to complete, saying that it would require ‘ time for reflection and for wide consultation’.”

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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD bounces after upbeat COVID-19 cure news

EUR/USD is trading above 1.13, rebounding from the lows. Gilead reported that its drug Remdesevir substantially reduces mortality among COVID-19 patients. The news boosted stocks and weighed on the dollar. US coronavirus statistics are due out.


GBP/USD recaptures 1.26 as the market mood improves

GBP/USD is trading above 1.26 as the market mood improves and the safe-haven dollar retreats. Investors are shrugging off Brexit concerns and focusing on hopes to cure coronavirus. US COVID-19 statistics are due out.


XAU/USD consolidates daily gains above $1,800

After advancing to its highest level since September of 2011 at $1,818 on Wednesday, the XAU/USD pair staged a correction and briefly dropped below $1,800 on Thursday.

Gold News

Cryptocurrencies: War for dominance hit the bedrock of the market

Bitcoin tried to regain market share and activated sales in the Altcoin segment. BTC/USD, ETH/USD and XRP/USD are looking for supports and a rebound to push them to new elative highs. The current compression on the XRP/USD chart could trigger an exploding movement.

Read more

WTI once again breaks $40 per barrel after trading lower in early EU trade

There has been quite the bounce in WTI since the EU session after some strong selling pressure during Thursday and overnight. Once again on Friday's session, the price has taken the USD 40 per barrel handle. 

Oil News