ECB: Déjà vu all over again as more easing on its way – Rabobank

By FXStreet FXStreet (Delhi) – Elwin de Groot, Senior Eurozone Strategist at Rabobank, notes that yesterday the ECB President Draghi hinted at further easing measures in March.

Key Quotes

“This was clearly supported by Draghi’s comment that “today, we did not want to determine specific instruments, but rather to assess the current and correct stance.” This will give the Council more flexibility in the run-up to the March meeting and also lowers the risk of markets ‘getting carried away’ with it.

Draghi argued that past policy measures “are working”, that recent indicators point to ongoing real GDP growth momentum into 2015Q4 and that the ECB expects the economic recovery to proceed this year, supported by monetary policy, low oil prices and a slightly expansionary fiscal stance. However, he emphasized that “downside risks to the outlook have increased again amid heightened uncertainty about emerging market economies’ growth prospects, volatility in financial and commodity markets, and geopolitical risks” and that inflation dynamics had also deteriorated, requiring the ECB to “review and reconsider” its monetary policy stance in early March, when the next staff projections become available.

In the Q&A session, Mr. Draghi explained that although the measures taken in December were entirely appropriate given the circumstances …read more

Source:: FX Street