ECB Pres. Lagarde: Increasing signs of bottoming out in growth.

  • There are increasing signs of a bottoming-out in growth and some forward-looking indicators point to a pick-up later this year.
  • Wage pressures, meanwhile, remain strong.
  • The current disinflationary process is expected to continue, but the governing council needs to be confident that it will lead us sustainably to our 2% target.
  • Labour cost increases are partly buffered by profits and are not being fully passed on to consumers.
  • We expect inflation to continue slowing down, as the impact of past upward shocks fades and tight financing conditions help to push down inflation.
  • Our restrictive monetary policy stance, the ensuing strong decline in headline inflation, and firmly anchored longer-term inflation expectations act as a safeguard against sustained wage price spiral.
  • Wage pressures meanwhile remain strong

A constant theme is wage costs and its impact on inflation, and also help it may limit rate cuts.

The EURUSD is marginally lower but only by a few pips…

This article was written by Greg Michalowski at Source