6 Nov 2014
ECB: Inching closer to QE - ANZ
FXStreet (Bali) - David Cannington, Senior Economist at ANZ, notes that the market read the ECB statement as proof that the CB is preparing the groundwork for the imminent introduction of QE.
Key Quotes
ECB President Mario Draghi took the opportunity to strengthen existing forward guidance at the November press conference. The expectations or qualitative component of forward guidance was strengthened by confirmation that: “The Governing Council has tasked ECB staff and the relevant Eurosystem committees with ensuring the timely preparation of further measures to be implemented, if needed.”
The market read the above statement as proof that the ECB is preparing the groundwork for the imminent introduction of QE (sovereign bond purchases in the next three months). However, it is not the ECB’s central case expectation that it will have to adopt such measures, and the preparations are contingency plans. For now, the ECB remains confident that its announced policies should be sufficient.
Key Quotes
ECB President Mario Draghi took the opportunity to strengthen existing forward guidance at the November press conference. The expectations or qualitative component of forward guidance was strengthened by confirmation that: “The Governing Council has tasked ECB staff and the relevant Eurosystem committees with ensuring the timely preparation of further measures to be implemented, if needed.”
The market read the above statement as proof that the ECB is preparing the groundwork for the imminent introduction of QE (sovereign bond purchases in the next three months). However, it is not the ECB’s central case expectation that it will have to adopt such measures, and the preparations are contingency plans. For now, the ECB remains confident that its announced policies should be sufficient.