5 Mar 2015
ECB: Cards out on the table; bullish outlook - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank said the ECB had already put all its cards on the table in January’s meeting, and it didn’t come as a surprise that today’s press conference wasn’t the most concrete of all meetings.
Key Quotes:
"On 9 March, i.e. next Monday, the Eurosystem will start buying public sector bonds in the secondary market, while it also continues purchasing ABS and covered bonds, at a combined pace of EUR 60bn per month. This was literally the only QE-related “novelty” of the press conference."
"The sun was shining in Nicosia and Draghi was in a good mood. According to the Governing Council, the euro area is already reaping the rewards of QE as financial conditions have improved and borrowing conditions for the private economy have eased."
"Moreover, business- and consumer confidence are improving and the transmission mechanism of monetary policy is firming. This will ultimately contribute to a further improvement in the economic outlook."
"Finally, the fall in oil prices should continue to support real disposable household income and, given that the euro area is a net oil-importer, give corporate profits a welcome boost as well. The euro area is a happy place, so it seems (we bet the Cypriots know better!)."
"We rather take this renewed optimism with a grain of salt as the ECB is radiating self-confidence in the hope of successfully managing the market’s expectations."
"QE only works when people believe it works, after all. This also underpinned the positive note of the economic analysis."
"According to the ECB, the risks still remain on the downside but now seem to have diminished, thanks to the decline in oil prices. Remarkable was that Draghi completely passed over the fact that the glut in oil prices is not only driven by excess supply."
Key Quotes:
"On 9 March, i.e. next Monday, the Eurosystem will start buying public sector bonds in the secondary market, while it also continues purchasing ABS and covered bonds, at a combined pace of EUR 60bn per month. This was literally the only QE-related “novelty” of the press conference."
"The sun was shining in Nicosia and Draghi was in a good mood. According to the Governing Council, the euro area is already reaping the rewards of QE as financial conditions have improved and borrowing conditions for the private economy have eased."
"Moreover, business- and consumer confidence are improving and the transmission mechanism of monetary policy is firming. This will ultimately contribute to a further improvement in the economic outlook."
"Finally, the fall in oil prices should continue to support real disposable household income and, given that the euro area is a net oil-importer, give corporate profits a welcome boost as well. The euro area is a happy place, so it seems (we bet the Cypriots know better!)."
"We rather take this renewed optimism with a grain of salt as the ECB is radiating self-confidence in the hope of successfully managing the market’s expectations."
"QE only works when people believe it works, after all. This also underpinned the positive note of the economic analysis."
"According to the ECB, the risks still remain on the downside but now seem to have diminished, thanks to the decline in oil prices. Remarkable was that Draghi completely passed over the fact that the glut in oil prices is not only driven by excess supply."