ECB to tread an increasingly dovish path - ANZ

According to Brian Martin, analyst at ANZ, ECB cannot ignore the fact indefinitely that the Euro area inflation and inflation expectations this year are persistently deviating away from the European Central Bank’s HICP target of close to but below 2.0%.

Key Quotes

“Geopolitical and protectionist risks have risen recently, increasing the downside risks to growth against a faltering domestic manufacturing expansion and modest growth, at best.”

“We expect the ECB to articulate a dovish assessment of developments when it meets this week and indicate that it remains open to deploying whatever policy tools are necessary to boost inflation if needed.”

“Maintaining ECB relevance and credibility in the current low inflation climate points to a growing need to update forward guidance soon.”