5 Mar 2015
ECB to upgrade GDP forecast due to the probable boost from QE's impact – TDS
FXStreet (Barcelona) - The TD Securities Team comments on today’s ECB meeting, expecting the central bank to upgrade GDP and CPI forecasts, and noting that the impact on EUR/USD won’t be significant.
Key Quotes
“For today’s ECB meeting, this should not be a particularly market moving one for once, as the major announcements have been made, and perhaps the biggest risk around EURUSD is the congestion around 1.10 for options and technical levels.”
“There are still a few operational details which needed to be clarified in terms of exactly when asset purchases will begin and under exactly what rules, which may lead to some relative shifts in the EGB market, while having the rubber finally meet the road in March in starting purchases should reinforce the trend for euro lower.”
“GDP forecasts will need to be upgraded simply because now they must include the impact of QE, which will likely add about 0.5pp to the 2015 and 2016 figures.”
“This should also see the CPI forecasts for 2016 upgraded slightly (2015 is a done deal to be cut), but the one key will be 2017 HICP. The ECB must signal that they announced enough policy measures to return that to target, which means we would expect a forecast within 1.7-2.0%.”
Key Quotes
“For today’s ECB meeting, this should not be a particularly market moving one for once, as the major announcements have been made, and perhaps the biggest risk around EURUSD is the congestion around 1.10 for options and technical levels.”
“There are still a few operational details which needed to be clarified in terms of exactly when asset purchases will begin and under exactly what rules, which may lead to some relative shifts in the EGB market, while having the rubber finally meet the road in March in starting purchases should reinforce the trend for euro lower.”
“GDP forecasts will need to be upgraded simply because now they must include the impact of QE, which will likely add about 0.5pp to the 2015 and 2016 figures.”
“This should also see the CPI forecasts for 2016 upgraded slightly (2015 is a done deal to be cut), but the one key will be 2017 HICP. The ECB must signal that they announced enough policy measures to return that to target, which means we would expect a forecast within 1.7-2.0%.”