ECB: A more cautious approach – BNP Paribas

Louis Boisset, analyst at BNP Paribas, points out that in view of the ECB, risks surrounding the Eurozone economic outlook have moved to the downside, because of the persistence of uncertainties.

Key Quotes

“Firstly, a more cautious speech. Assessment of risks has changed. Globally balanced so far, risks surrounding the Eurozone economic outlook have moved to the downside, because of the persistence of uncertainties related to geopolitical factors and the threat of protectionism. Caution seems to be the order of the day, for both the ECB and investors.”

“The Governing Council remains confident that inflation will move towards its 2% target. Mario Draghi insisted on the fact that the transmission of wage dynamics to core inflation needs time.”

“If economic growth keeps going down, the ECB would use all instruments form its toolbox, for instance its long-term lending. Although Mario Draghi has mentioned it, saying that discussions are taking place between Council members, any decisions on the matter have been delayed until a later date.”