24 Mar 2015
ECB might undertake more QE purchases than what’s being priced in – RBS
FXStreet (Barcelona) - With Draghi reiterating in yesterday’s speech that the QE purchases stands to be implemented fully, the team at RBS, expects the central bank to undertake more QE than what’s priced in, which will keep the downward pressure on the EUR intact.
Key Quotes
“ECB President Draghi stressed today that the ECB’s outlook for inflation to rise over its forecast horizon is conditional on the full implementation of its QE program, which is planned to run at least through September 2016.”
“The ECB has noted a pickup in growth indicators, and ECB President Draghi said that the already-taken stimulus, lower oil prices, and a weaker EUR are likely contributing to stronger growth figures of late, and PMIs released … for March in the Euro-area, including Germany and France, are key growth indicators to watch.”
“Still, ECB commentary suggests it remains committed to enacting its targeted QE even amidst an improvement in growth momentum. Ultimately, we expect the ECB will undertake more QE purchases than is currently priced in.”
“While positioning clearout may boost the EUR in the near-term, the EUR’s emerging stance as a global funding currency is a medium-term theme that remains squarely in place and likely keeps downward pressure on the EUR.”
Key Quotes
“ECB President Draghi stressed today that the ECB’s outlook for inflation to rise over its forecast horizon is conditional on the full implementation of its QE program, which is planned to run at least through September 2016.”
“The ECB has noted a pickup in growth indicators, and ECB President Draghi said that the already-taken stimulus, lower oil prices, and a weaker EUR are likely contributing to stronger growth figures of late, and PMIs released … for March in the Euro-area, including Germany and France, are key growth indicators to watch.”
“Still, ECB commentary suggests it remains committed to enacting its targeted QE even amidst an improvement in growth momentum. Ultimately, we expect the ECB will undertake more QE purchases than is currently priced in.”
“While positioning clearout may boost the EUR in the near-term, the EUR’s emerging stance as a global funding currency is a medium-term theme that remains squarely in place and likely keeps downward pressure on the EUR.”