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ECB reiterates easier policy measures, EUR waits for Draghi


The ECB has done nothing to change the outlook for monetary policy. It’s decision to hold rates steady has been met with a shrug of shoulders by the euro. The only thing of note in the history books from the October 2019 meeting will be a meeting remembered for one thing: the end of Mario Draghi’s tenure as ECB President.

ECB statement

The statement of monetary policy could not have been more bland today:

  • Rates steady (the deposit rate remains at -0.50%).
  • The ECB expects “interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon”.
  • Asset purchases of €20bn per month to “run for as long as necessary”.
  • Reinvesting principal payments of maturing securities for an extended period of time past any rate hikes.

 

ECB statement Oct

 

Draghi’s final press conference

There was little to really impact on markets in the press conference, however, Draghi really did use his last opportunity to push for more fiscal support from governments in order to improve euro-area productivity. “implementation needs to be stepped up substantially. We see this as euro positive and a mantle that Christine Lagarde will take into her tenure..

 

Market Reaction

There has been almost nothing on euro until Draghi mentioned fiascal support. However, there is nothing to really sustain a move higher .

This has been a very forgettable policy meeting for the ECB (aside from the celebration of Mario Draghi that is).

 


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At Hantec Markets Ltd we provide an execution only service. Any opinions expressed by analyst Richard Perry should not be construed as investment advice or an investment recommendation. This report does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. Forex and CFDs are leveraged products which can result in losses greater than your initial deposit. Therefore you should only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved, seeking independent advice if necessary prior to entering into such transactions.