SEB Research comments on today’s ECB meeting in which the Governing Council left policy rates and the size of QE unchanged, and removed the interest rate easing bias but left its forward guidance unchanged in all other aspects.
“ECB Staff projections for EZ GDP growth were revised slightly higher over the 2017-2019 forecast horizon; all inflation projections were revised downwards, mainly to reflect lower oil prices.
Contrary to our expectation the Governing Council postponed an exit strategy discussion, presumably to avoid a hawkish signal ahead of the summer recess. Market reaction (bonds, FX) was subdued as a dovish outcome had already leaked a day earlier.
We stick with our view that the ECB will come to a decision on changes to QE in 2018 at its first meeting after the summer recess (Sept 07),” SEB argues.
Source: SEB Research
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