German Central Bank Ready To Back ECB Policy Play

The Bundesbank is ready to support European Central Bank policy action if it is needed and this is not new, two Bundesbank sources said on Tuesday.

Policymakers are looking at all relevant data, and inflation forecasts for 2016 are important but not the only decisive figure, the sources said.

ECB President Mario Draghi said last Thursday the bank is ready to take action next month to boost the euro zone economy if updated inflation forecasts merit it.

“We have always said that we are willing to act if this is really needed,” a high ranking Bundesbank source said. The second source at the German central bank confirmed this.

Earlier, The Wall Street Journal, citing a person familiar with the matter, reported that the Bundesbank was willing to back an array of stimulus measures from the ECB next month, including a negative rate on bank deposits and purchases of packaged bank loans if needed to keep inflation from staying too low.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza