Draghi: Sept ECB Press Comments

September 7, 2017 Share Print 0

Rates at Present Levels For Extended Period

QE to Run at EUR60B Per Month Until Dec. ’17, Or Beyond If Needed

Draghi: Information Confirms Broadly Unchanged Outlook

Expansion Is Solid, Broad-Based Across Countries, Sectors

Recent Fx Volatility a Source of Uncertainty, Requires Monitoring

Expansion Not Yet Translated to Stronger Inflation Trend

Underlying Inflation Ticked Up Slightly, But Still Subdued

Very Substantial Degree of Accommodation Still Needed

Ready to Increase QE If Outlook Less Favorable

To Decide in Autumn on Policy Calibration In Next Year

Policy Measures Supporting Domestic Demand

Staff See 2017 GDP Growth at 2.2% vs 1.9% Seen in Jun

Staff See 2018 GDP Growth at 1.8% vs 1.8% Seen in Jun

Risks to Outlook Broadly Balanced

Headline Inflation Likely to Temporary Decline Near Turn Of Yr

Domestic Cost Pressures Still Subdued

Underlying Inflation to Rise Gradually Over Medium Term

Staff See 2017 HICP at 1.5% vs 1.5% Seen in Jun

Council Members Spoke on Growth, Inflation and Exchange Rate

Recovery Is Base for Confidence That Inflation Will Eventually Converge

Recovery Remains Dependent on Monetary Policy

Consumption Is Doing Well, Because of Disposable Income Increasing

Exchange Rate Not a Policy Target

Will Have to Take Fx Into Account in Future Policy Decisions

The EUR extends its gains, rising well above €1.20 as ECB’s Draghi continues to speak. He has expressed concern about the strength of the euro and its potential to weigh on inflation.

However, he notes core inflation is “doing slightly better” and adds concerns about the exchange rate are “tempered by confidence that inflation will eventually converge, based on the good conditions of the economy.”

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Dean Popplewell

Vice-President of Market Analysis at MarketPulse

Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments.
He has a deep understanding of market fundamentals and the impact of global events on capital markets.
He is respected among professional traders for his skilled analysis and career history as global head
of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean
has played an instrumental role in driving awareness of the forex market as an emerging asset class
for retail investors, as well as providing expert counsel to a number of internal teams on how to best
serve clients and industry stakeholders.