ECB’s Mario Draghi press conference following the April 2018 monetary policy meeting 26 April 2018

  • QE will run until sustained inflation adjustment
  • Moderation is may reflect a pullback from the strength last year but momentum is still solid and broad based
  • Risks to growth are broadly balanced
  • Sees inflation at around 1.5% this year

So, pretty much a mild acknowledgement of the softer data but that’s all. EURUSD rising. Now at 1.2195 from 1.2146.

  • Eurozone reforms need to be substantially stepped up (a bit sterner rhetoric than usual)
  • Really going strong on Eurozone countries getting their acts together

Into the Q&A now.

  • Draghi: We didn’t discuss mon pol per se
  • There’s no strategy behind lower CSPP buys recently
  • Unexpected factors behind recent data weakness could be weather, strikes and timing of Easter
  • Some other areas could suggest softer demand
  • Urges caution against this softer data tempered with confidence in the economy
  • Confidence in inflation is unchanged but is conditional on maintaining an ample degree of accommodation
  • Exchange rate has stabilised so was not discussed (very short and sweet on that answer)

1.22 blows ?

  • We haven’t discussed future policy (relating to a question on June)

That’s the can kick folks. EURUSD not disappointed by that remark.. Still above 1.22, just about

  • We didn’t discuss policy per se because the use of new information is important for making decisions (In June we get the next staff projections)
  • We need to understand whether slowdown is temporary or permanent
  • Constancio: Doubts we can go back to simple mon pol
  • Constancio: Unconventional policy could be used again

Back to Draghi

  • We are ready to adapt to any unwarranted tightening
Ryan Littlestone

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