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2 Apr 2014
ECB faces a close call tomorrow – Danske Bank
FXStreet (Edinburgh) - Pernille Nielsen, Analyst at Danske Bank, remarks that further easing is not totally ruled out by the ECB in its meeting due tomorrow.
Key Quotes
“ECB vice president Constancio made some hawkish comments yesterday and our close call for more easing on Thursday now looks even closer”.
“Related to inflation he said the ECB expects ‘the low figure of inflation in March will be corrected to a high figure already in April’”.
“Regarding the recovery he described it as weak ‘but it’s a recovery’. These comments two days ahead of the ECB meeting are very important and indicate that the decline to a new cycle low in inflation is not enough to tilt the balance of the Governing Council in favour of more easing”.
“Although it looks less likely that the ECB will decide to ease on Thursday, there is still some probability of this, as the ECB could be concerned about the decline in wage growth to a level near the one in 2009”.
Key Quotes
“ECB vice president Constancio made some hawkish comments yesterday and our close call for more easing on Thursday now looks even closer”.
“Related to inflation he said the ECB expects ‘the low figure of inflation in March will be corrected to a high figure already in April’”.
“Regarding the recovery he described it as weak ‘but it’s a recovery’. These comments two days ahead of the ECB meeting are very important and indicate that the decline to a new cycle low in inflation is not enough to tilt the balance of the Governing Council in favour of more easing”.
“Although it looks less likely that the ECB will decide to ease on Thursday, there is still some probability of this, as the ECB could be concerned about the decline in wage growth to a level near the one in 2009”.