ECB: Déjà vu moment - Rabobank

The ECB meeting brought the market no surprises on the policy front as the Governing Council decided to leave its key interest rates unchanged, points out the research team at Rabobank.

Key Quotes

“The asset purchase programme also continues unaltered. Both decisions were fully in line with expectations.”

“Despite calls for a change in the forward guidance from some Council members, the guidance was not updated either. In fact, the entire press release was practically a copy-paste from the December meeting. We, and many others with us, were not expecting any changes in today’s meeting however.” 

“A Council debate on the rework of the wording in the forward guidance by March still seems to be relatively likely. However, Mr. Draghi stopped short of promising a discussion. Instead he pointed to the new forecasts that may (or may not) cause them to start a discussion – that is, the ECB is data dependent.”

“On the upside, President Draghi noted that the Governing Council had been surprised by the acceleration of the Eurozone economy in the second half of the year – based on the data currently available. Then again, the recent EUR appreciation could cause further concern about the inflation outlook; for instance, the rise in commodity prices has been largely negated by the stronger currency.”