ECB's Draghi says growth has moderated, outlook solid

  • ECB's Draghi says growth has moderated, outlook solid

ECB's Draghi says growth has moderated, outlook solid

"Euro/dollar continues to fall as long positioning gets pared back against a backdrop of negative realised returns and we remain tactically bearish on the pair", the analysts said. He said, however, taht the slowdown could also reflect more durable weaknesses.

Regarding non-standard monetary policy measures, the Governing Council confirms that the net asset purchases, at the current monthly pace of €30 billion, are meant to run until the end of September 2018, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim.

If that is the case, it is "a risky position to be in", Mr Vistesen said. "The very first thing we have to do is place what has happened in the proper context". Having risen around 25 basis points since early April, the yield is a whisker off the 3.041 percent mark that would be a new four-year high. Instead, analysts expect the European Central Bank to delay a final decision over its stimulus settings until meetings in either June or July.

"The ECB is largely brushing off concerns about a soft patch in the economy for the moment", said Frederik Ducrozet, an economist with Pictet Wealth Management in Geneva.

While the ECB's 2.55 trillion euro ($3.10 trillion) bond purchase programme, has cut borrowing costs and kick-started growth, although with no inflationary effect, policymakers will need to end the indefinite growth of money.

The ECB president is not expected to offer any clues about when the bank will end its stimulus program, under which it purchases 30 billion euros ($37 billion) of bonds per month. European Central Bank rate-setters have so far remained sanguine but investors have pushed back their expectations for an European Central Bank rate hike.

A year ago was the strongest in a decade for economic growth in the euro zone, but a recent slump in investor sentiment since the start of 2018 could threaten the ECB's inflation outlook.

Following a meeting of the ECB's governing council, the Eurozone's central bank revealed that interest rates on refinancing and on lending would remain unchanged at 0 per cent and 0.25 per cent respectively.

Only two more meetings remain before September.

He also stated that risks related to global factors, including the threat of increased protectionism, have become more prominent. He said business confidence had already been weakened by the possibility of higher tariffs.