- Europe must prepare for greater financial safe haven role
- Risks to growth and inflation are balanced
- Inflation expectations are fully anchored, and FX movements already factored in
- Policy stance is appropriate
- A change in environment is needed to change our policy stance
There are no surprises in his remarks, mainly just reaffirming what we know from the ECB since the turn of the year. As things stand, they are not in any hurry to shift gears and to make any changes to policy setting. And markets know that well in not pricing in any moves by the ECB for the year, at least for now.
Some slight stubbornness in price pressures and a more resilient economy has been two main things that are in play. On the counter though, there is the stronger euro and that was the a focus point at the ECB’s latest meeting. For now, policymakers are brushing things aside despite some more active remarks as EUR/USD nears the 1.20 level.
As a reminder, ECB vice president Luis de Guindos previously put a pin on that level in calling it “complicated” for the central bank.
This article was written by Justin Low at investinglive.com.