ECB president Mario Draghi delivers the opening remarks at the ECB forum for central banking in Sintra, Portugal
- Eurozone economy continues on a growth path
- Uncertainty permeates the economic outlook
- Monetary policy will remain patient, persistent, prudent
- Uncertainty surrounding the growth outlook has recently increased
- Growth expectations for the medium-term remains essentially unchanged
- There is growing evidence that broad-based economic growth is beginning to generate positive pricing dynamics
- Downside risks to global economy include increased protectionism threats
- Also includes rising oil prices on geopolitics and persistent heightened market volatility
- Upside risks include fiscal expansion in the US
- 'Significant' monetary accommodation still needed
- ECB to be patient in determining timing of first rate hike
- ECB to take gradual approach after first rate increase
- Market-implied rate path broadly reflects ECB's intention
- ECB confidence in path of inflation is rising
Well, there isn't anything that differs all too much from what we heard from Draghi last week. But this basically reaffirms the notion that the central bank is looking towards a rate hike in Q3 2019 now - no repeat of the statement from Draghi this time around to toy with reporters.
And even then, it's likely to be a pause thereafter as the ECB assesses the conditions. Do note that this is the base case scenario if all things are equal and hold up.
Should we see further deterioration in the Eurozone economy next year, it will make for a very different tone by the ECB I would reckon.
