9 May 2014
Draghi remains on the dovish side – Danske Bank
FXStreet (Edinburgh) - Analyst Anders Fischer remarked the dovish tone from ECB’s Draghi in his press conference on Thursday.
Key Quotes
“The ECB abstained from easing yesterday but Mario Draghi was very dovish, saying that the discussion at the Council meeting was a ‘preview of the June meeting’ and that ‘the council is comfortable with acting next time’”.
“Although the prepared statement was broadly unchanged regarding the economic outlook, Draghi pointed out that ‘there is a consensus about being dissatisfied with the projected path of inflation’, indirectly citing the reason for more policy action”.
“Furthermore, the effect of the strong EUR on the inflation outlook was highlighted as ‘the strengthening of the exchange rate in the context of low inflation is cause for serious concern in view of the Governing Council’.
“We expect a downward revision of the staff projections for inflation in June and based on these new forecasts the ECB, we think, will cut the MRO and deposit rate by 10bp bringing the latter in negative territory”.
Key Quotes
“The ECB abstained from easing yesterday but Mario Draghi was very dovish, saying that the discussion at the Council meeting was a ‘preview of the June meeting’ and that ‘the council is comfortable with acting next time’”.
“Although the prepared statement was broadly unchanged regarding the economic outlook, Draghi pointed out that ‘there is a consensus about being dissatisfied with the projected path of inflation’, indirectly citing the reason for more policy action”.
“Furthermore, the effect of the strong EUR on the inflation outlook was highlighted as ‘the strengthening of the exchange rate in the context of low inflation is cause for serious concern in view of the Governing Council’.
“We expect a downward revision of the staff projections for inflation in June and based on these new forecasts the ECB, we think, will cut the MRO and deposit rate by 10bp bringing the latter in negative territory”.