Further comments by ECB member Ewald Nowotny

  • Narrative outlined in December meeting is still valid
  • Does not expect major policy changes in the near future
  • It is obvious economic data has developed worse than expected recently
  • Decision on LTRO not urgent

The ECB is likely to wait on Q1 economic data before deciding anything on changes to the rate guidance. If last year's slowdown continues to linger in the economy as we begin the year, expect policymakers to feel shifty and leaning more towards pushing back the current rate guidance message.

The first sign of a change to look out for will be to see if they will change their risk assessment as being "broadly balanced" to "tilted to the downside" in the coming meetings.