ECB bar for more easing quite high now – Danske Bank

By FXStreet FXStreet (Córdoba) – According to analysts from Danske Bank, the less aggressive move from the European Central Bank (ECB) together with today’s communication indicates that the bar for more easing is quite high.

Key Quotes:

“Markets priced a 15bp deposit rate cut ahead of the meeting and most analysts also expected an expansion of the monthly purchases, hence the measures were not enough to fulfil expectations.”

“We had also expected the ECB to reintroduce its old forward guidance on possibly lower policy rates, implying some probability of an additional cut could still be priced in, but this was not the case. The decision taken today was not unanimous, but based on a large majority. It remains unknown whether some ECB members had argued for more or less easing, but compared to Draghi’s previous very dovish comments, it could be that he had argued for more aggressive easing.”

“The less aggressive move from the ECB together with today’s communication indicates that the bar for more easing is quite high. Hence, although the ECB did not deliver the menu of easing we had looked for, we expect the easing today to mark the end of easing.”

“In the near term, base effects should …read more

Source:: FX Street