Press conference of the March 2018 ECB meeting with Mario Draghi
- We still kept our message that we are prepared to run QE past the end date if needed and that we will continue to re-invest
- There wasn’t much discussion about other possible changes
- Policy will continue to be reactive
Pouring some cold water that this was a significant language change
EURUSD now goes into reverse and is back under 1.2400
- Policy will continue to be reactive
- Immediate spillover from US tariffs won’t be big
- We are concerned about the state of international relations
- If tariffs are on friends, who are the enemies
- In judging the impact, will there be an impact on FX and on confidence
- Fiscal sustainability is of utmost concern regarding Italy
Here’s the highlights from his opening statement;
- Growth to rise faster than expected
- Underlying inflation is still subdued
- We will monitor FX developments
- ECB sees 2018 GDP at 2.4% vs 2.3% prior
- 2019 1.9% unch
- 2020 1.7% unch
- Downside risks include developments in FX and rising protectionism
- CPI 2018 1.4% unch
- 2019 1.4% vs 1.5% prior
- 2020 1.7% unch
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