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4 Jul 2014
ECB left the door open for further measures, if necessary – Danske Bank
FXStreet (Edinburgh) - Analysts at Danske Bank explained the recent ECB announcements and the main topics in Draghi’s press conference.
Key Quotes
“The ECB will change the frequency of its monetary policy meetings to a six-week cycle from January 2015 (the schedule dates will be published on 16 July). At the same time, the ECB will start to publish minutes of the monetary policy meetings. The ECB is still working on how much information the minutes will contain”.
“Draghi was again asked whether the ECB could cut policy rates further and to that he repeated that technical adjustments could be made. But he also made it very clear that the ECB will keep the rate corridor unchanged; hence, a cut of 5-10bp in the refi and deposit rate is all that is left in the toolbox”.
“The possibility of a broad-based QE programme was also a topic and Draghi kept the door open as he said it completely depends on the medium-term outlook for inflation. If inflation declines, QE could be started even before the new TLTROs have ended as Draghi said that ‘there are no other considerations’ than the medium-term outlook for inflation”.
“If anything, we believe an ABS purchase programme is most likely. Today’s comments from Draghi show that such a programme will be simple and aimed at improving the situation of SMEs in the periphery countries”.
Key Quotes
“The ECB will change the frequency of its monetary policy meetings to a six-week cycle from January 2015 (the schedule dates will be published on 16 July). At the same time, the ECB will start to publish minutes of the monetary policy meetings. The ECB is still working on how much information the minutes will contain”.
“Draghi was again asked whether the ECB could cut policy rates further and to that he repeated that technical adjustments could be made. But he also made it very clear that the ECB will keep the rate corridor unchanged; hence, a cut of 5-10bp in the refi and deposit rate is all that is left in the toolbox”.
“The possibility of a broad-based QE programme was also a topic and Draghi kept the door open as he said it completely depends on the medium-term outlook for inflation. If inflation declines, QE could be started even before the new TLTROs have ended as Draghi said that ‘there are no other considerations’ than the medium-term outlook for inflation”.
“If anything, we believe an ABS purchase programme is most likely. Today’s comments from Draghi show that such a programme will be simple and aimed at improving the situation of SMEs in the periphery countries”.