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Draghi: Sept ECB Press Comments

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  • Rates at Present Levels For Extended Period
  • QE to Run at EUR60B Per Month Until Dec. ’17, Or Beyond If Needed
  • Draghi: Information Confirms Broadly Unchanged Outlook
  • Expansion Is Solid, Broad-Based Across Countries, Sectors
  • Recent Fx Volatility a Source of Uncertainty, Requires Monitoring
  • Expansion Not Yet Translated to Stronger Inflation Trend
  • Underlying Inflation Ticked Up Slightly, But Still Subdued
  • Very Substantial Degree of Accommodation Still Needed

  • Ready to Increase QE If Outlook Less Favorable
  • To Decide in Autumn on Policy Calibration In Next Year
  • Policy Measures Supporting Domestic Demand
  • Staff See 2017 GDP Growth at 2.2% vs 1.9% Seen in Jun
  • Staff See 2018 GDP Growth at 1.8% vs 1.8% Seen in Jun
  • Risks to Outlook Broadly Balanced
  • Headline Inflation Likely to Temporary Decline Near Turn Of Yr
  • Domestic Cost Pressures Still Subdued
  • Underlying Inflation to Rise Gradually Over Medium Term
  • Staff See 2017 HICP at 1.5% vs 1.5% Seen in Jun
  • Council Members Spoke on Growth, Inflation and Exchange Rate
  • Recovery Is Base for Confidence That Inflation Will Eventually Converge
  • Recovery Remains Dependent on Monetary Policy
  • Consumption Is Doing Well, Because of Disposable Income Increasing
  • Exchange Rate Not a Policy Target
  • Will Have to Take Fx Into Account in Future Policy Decisions

    • The EUR extends its gains, rising well above €1.20 as ECB’s Draghi continues to speak. He has expressed concern about the strength of the euro and its potential to weigh on inflation.

    However, he notes core inflation is “doing slightly better” and adds concerns about the exchange rate are “tempered by confidence that inflation will eventually converge, based on the good conditions of the economy.”

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    Dean Popplewell

    Dean Popplewell

    Vice-President of Market Analysis at MarketPulse
    Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
    Dean Popplewell

    @dean_forex

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