There goes today’s euro gains
- Governing council unanimous in it’s willingness to deploy conventional and unconventional measures to effectively counter risks of very low inflation over a prolonged period
- Sees no signs of deflation taking hold in eurozone but should at least be prepared for residual risks of deflation
- Long term inflation expectations firmly anchored but long period of low inflation risk un-anchoring long term expectations
Looks like the market was half asleep as that headline crossed. We dropped to 1.3703 before recovering back to 1.3718.
Adds;
- The ECB can’t perform magic on the economy
- Global initiative on SME ABS would be desirable
Possibly a clue in the direction the ECB want to take with any action.
