ECB: Taking a step back - BNPP

At the press conference following the Governing Council meeting on 20 July, the European Central Bank appeared to take a step back from earlier reflation talk, notes Luigi Speranza, Head of European Market Economics at BNP Paribas.

Key Quotes

“Mario Draghi’s key message was that the stronger growth outlook had yet to translate into a robust pickup in inflation, continuing to require very substantial monetary accommodation.”

“Should the euro strengthen further, we would not be surprised to hear tougher rhetoric from the ECB on the inflation and growth risks posed by tighter financial conditions.”

“The comments tie in with our view that the ECB will signal a reduction of its asset purchases in September but not announce it until October, with changes to take effect in January.”