The ECB has revised slightly down the growth forecast for the eurozone, but remained virtually unchanged the expected path of inflation, announced the president of the ECB press conference after the September meeting of the Governing Council. Against this backdrop, Mario Draghi did not announce any increase or change to the asset purchase program, preferring to value levels “very substantial” monetary stimulus in the field, which should remain until it is needed.
The new ECB projections indicate a growth of 1.7% this year and 1.6% in 2017 and 2018, reflecting a slight “downward revision” in view of the June projections, when the ECB pointed to an acceleration of growth 1.7% in 2018, Draghi said. For inflation figures remained “similar in general terms,” the president of the institution:. 0.2% in 2016, 1.2% in 2017 and 1.6% in 2018
These amounts include a positive cumulative effect of ECB stimulus of 0.6 percentage points in the growth of three years (2016-2018) and 0.4 percentage points in inflation, the central banker needed to argue that Frankfurt policies are to be effective .
in view of these data, Draghi sent a message of cautious optimism. ECB’s measures are to take effect, but the risks are negative so you have to be alert. And if for now there are no signs that warrant further stimulus, the ECB will not hesitate to act if downside risks materialize, guaranteed.
“Our assessment is that so far the changes do not justify any decision to act “with more stimulus, he said, stressing the importance of the package is already on the ground:” we will preserve the very substantial levels of monetary stimulus that are necessary “to ensure the expected recovery,” but the risks are negative, “he warned, repeating an old security: the ECB is “prepared” and “willing” to act if it deems necessary. Draghi also left a message to governments: the structural reforms should be “substantially accelerated” and the countries that can should use fiscal policy to support recovery
The lack of news took the bags to fall after. positive results in the morning: 15:30 PSI-20 in Lisbon was falling 0.16% and the Stoxx 600 European-retreated 0.56%. As for the public debt interest rose, with the rate to 10 years to return to values above 3%.
ECB studies debt purchases without following key capital
at the press conference, the central banker gave way only to change the purchase program to ensure their “smooth implementation”. That’s what the Council mandated the “relevant Committees” of the bank: should in the coming weeks look for solutions to overcome the shortage of titles that compromises the procurement plan of 80 billion euros per month, which will continue at least until March 2017 and that there if necessary.
At issue are limitations resulting from program rules, such as the need to purchase obligations under the weight of each country in the ECB’s capital key, the impossibility of acquiring more than 33% of each issue , or buy bonds with a lower interest rate to -0.4% (which currently excludes for example the German government debt with maturity up to seven years).
“The key is to ensure that our program and the decisions we have taken can be implemented in the new constellation of interest rates [lower], which clearly limited the eligibility of assets,” he said, ensuring that technical teams have carte blanche to study every chance of adjustment to the current program.
“The committees have full mandate to look at all the options that can be used to redesign the light to the program in the new constellation of interest rates, and then Conseho will have a discussion on the various issues, such as one who relates, “said a journalist who questioned whether on the table would also be the possibility of shifts in the distribution of purchases due to the participation of each country in the ECB’s capital key – this is a politically sensitive case which could pave the way for more public debt purchases in the most fragile economies like Italy or France, and less shopping in Germany.
Other possible action pass to extend the range of eligible assets to include, for example, bank obligations ( the ECB already buys companies) or shares. On these, perishes Draghi has signaled that it should not expect news, at least for now, responding that “our program is effective and we should focus on implementation” in accordance with the decisions announced in March.
No comments:
Post a Comment