ECB Surprise Move And Draghi’s Press Conference Comments


The European Central Bank surprised everyone by announcing a new series of refinancing operations and delaying when it expects to raise interest rates.

European policy-makers now say interest rates will remain at their present levels “at least through the end of 2019” versus “at least through the summer of 2019” at its previous statement.

The ECB announced new targeted longer-term refinancing operations on a quarterly basis, starting in September 2019 and ending in March 2021.

Headline comments:

  • Draghi: Weakening in Economic Data Points to Moderation in Growth Extending in 2019
  • Weaker Economic Momentum Slowing Inflation Adjustment to Aim
  • Significant Monetary Policy Stimulus Still Needed
  • ECB Stands Ready to Adjust All Instruments, If Needed
  • Recent Data Still Weak, Reflecting Soft Foreign Demand, Special Factors
  • Near-Term Growth Momentum Weaker Than Previously Expected
  • Activity Supported by Benign Financing Conditions, Rising Wage Growth
  • Eurozone 2019 GDP Seen +1.1% on Yr vs Earlier Estimate of +1.7%
  • Eurozone 2020 GDP Seen +1.6% on Yr vs Earlier Estimate of +1.7%
  • Eurozone 2021 GDP Seen +1.5% on Yr vs Earlier Estimate of +1.5%
  • Risks Surrounding Eurozone Growth Outlook Still Tilted to Downside
  • Substantial Downward Revision to 2019 Growth Estimate
  • Measures of Underlying Inflation Remain Generally Muted
  • Headline Inflation Likely to Decline Toward Year-End
  • Underlying Inflation Expected to Increase Over Medium Term
  • Eurozone 2019 HICP Seen +1.2% on Yr vs Earlier Estimate of +1.6%
  • Eurozone 2020 HICP Seen +1.5% on Yr vs Earlier Estimate of +1.7%
  • Eurozone 2021 HICP Seen +1.6% on Yr vs Earlier Estimate of +1.8%
  • New TLTROs Will Help Ensure Favorable Bank-Lending Conditions
  • In Coming Years “Congestion” of Bank Funding
  • Design of TLTROs Reflects Changed Econ Conditions
  • Moved Calendar-Based Part of Forward Guidance From September to December 2019
  • Financing Conditions Even Eased Since Last Meeting
  • All ECB Measures Data-Driven, Following Cuts in Staff Forecasts
  • ECB Committed to Act When, If Needed
  • Decision Was Taken Unanimously
  • “Positive Sign” That There is Unanimity
  • Uncertainty Partly Related to External Factors
  • Probability of Recession “Very Low” in ECB Assessment
  • Revisions to Inflation Path Show That it Will Take Longer to Reach Target (NYSE:)
  • We Kept Econ Risk Assessment as Being “Tilted to the Downside”
  • Latest ECB Actions Increase Resilience of Eurozone Economy
  • We Didn’t Tighten Monetary Policy When We Stopped QE
  • Conditions Are “Very, Very” Accommodative
  • Several Members Presented Option of Changing Calendar Guidance to Mar 2020
  • Markets Have “Pretty Well Understood” ECB’s Reaction Function
  • Latest Decisions Enhanced Credibility of ECB’s Foreward Guidance

The EUR has extended its fall outright, dropping -0.45% to a three-week low of €1.1255, as ECB President Mario Draghi announces cuts to growth and inflation forecasts.

EUR/USD for March 6-8, 2019.

EUR/USD for March 6-8, 2019.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.EUR

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Source link



Leave a Reply

error: Content is protected !!