In contrast with the previous ECB press conferences held since last summer, when President Draghi kept raising expectations of QE action and significant questions remained on the design of QE, the upcoming 15 April press conference promises to be somewhat boring. “In effect, we expect the Governing Council to maintain the status quo on all its policy decisions. In its introductory statement we expect the ECB to affirm the €60bn/month QE programme will run “until end-September or until inflation converges to 2.0% medium term”.” – said Societe GeneraleThe conference is also likely to highlight that it was able to meet the €60bn QE purchase target in March, defying some observers’ predictions. To downplay talks of early QE tapering, President Draghi is likely to maintain a dovish tone and indicate that the overwhelming majority of the Governing Council wants to implement QE in full. Although the economic outlook is improving, Draghi will likely argue that inflation expectations remain very low and that doubts about the sustainability and the magnitude of the current cyclical recovery persist. “In view of our still-low inflation forecasts for 2017 18, we expect the ECB to extend its easy monetary policy beyond September next year, through both asset purchases and liquidity measures. – adds Societe Generale
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