ECB: No changes to rates or the QE program are expected – BMO CM
|According to Jennifer Lee, Senior Economist at BMO Capital Markets, when the ECB meets today, no changes to rates (refi rate 0.0%, deposit rate -0.4%) or the QE program are expected.
Key Quotes
“This is the last month that the central bank will be buying €80 bln in securities; that drops to €60 bln as of April and will run through the remainder of the year. This is also the month that the new staff forecasts will be tabled. The GDP growth forecasts for 2017 and 2018 haven’t been touched since being lowered in September (both years to 1.6%), but the data of late suggest that the economy started the year on a stronger note. Inflation for 2017 was nudged higher (to 1.3%) in December; expect another lift in March.”
“The press conference will be a little more interesting, given that inflation finally hit 2% last month, the first time in over four years, so expect plenty of questions regarding plans to taper. Indeed, President Draghi is likely coming under pressure from Germany, a long-time critic of the bond buying program. However, the Governing Council will likely prefer to see core inflation pick up before publicly contemplating reining in the program, and core prices have gone nowhere (at or below 1%) for over three years.”
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