ECB: Coordinated push back? – ANZ

In view of the analysts at ANZ, overnight ECB executive council members were coordinated in pushing back against expectations that there may be a shift in policy (to something less dovish) on the horizon.

Key Quotes

“ECB President Draghi said that there was no need to deviate from current forward guidance and that there was no evidence yet of a sustainable recovery in inflation and that more “inflation confidence was needed”. Chief Economist Praet added that rates would stay at present or lower levels well past the end of QE. That was aimed at dampening market speculation that the deposit rate (-0.4%) may be raised around the end of the year.”

“Governing Council members are also sceptical about the core inflation forecasts, noting that there is no evidence of an acceleration in wages upon which the anticipated recovery in core inflation is largely based.”