Highlights from the January 2019 ECB press conference 24 January 2019

Opening remarks.

  • Incoming information has continued to be weaker than expected
  • Geopolitical and protectionist factors weighing
  • Rising wages underpins inflation pressures
  • Significant stimulus still needed
  • Council stands ready to adjust all it’s instruments
  • Near-term growth momentum looks weaker than expected
  • Risks to outlook have moved to the downside (That’s a dovish change from “broadly balanced” or “tilted to the downside”, as Kman mentioned in his preview).


  • Didn’t discuss the implication pf risk language change for guidance says ECB’s Draghi
  • Didn’t take a decision on TLTRO’s
  • Wages and labour market are moving in right direction
  • There is a profit squeeze and its a matter of time before wages are passed through
  • We were unanimous in assessing the factors causing the slowdown (Long and short, the slowdown is mainly due to external factors (Brexit just mentioned))
  • If factors were to persist, momentum will be weaker for longer
  • If growth is below potential the convergence to inflation will take longer
  • ECB will give itself more time to assess the risks
  • Will have another discussion in March (HOOOOOF)
  • We have not run out of instruments says
  • We have a full tool box available

And there we have it. Another humdrum presser with nothing much said to change anyone’s view of things. The ECB still sees external factors as the root of the weakness but no one bothered to ask if they would still ease policy on those external factors worsening, or would they ride them out and only ease if growth prospects deteriorated on internal factors. Yet another wasted opportunity for the press corp. The only notable change was to the ECB’s risk language, which does put a more dovish slant on things.

EURUSD looked at 1.1306 and finishes at 1.1370.


Ryan Littlestone

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