Comments by ECB president Draghi in Frankfurt
- Recently seen a loss in growth momentum
- But expects economic expansion to continue in the coming years
- Forward guidance has been effective in anchoring expectations about future path of interest rates
- If conditions should tighten or if inflation outlook deteriorates, it would be reflected in an adjustment in the expected path of future interest rates
- Witnessing a long-term slowdown in world trade
- Anticipates that QE will come to an end in December
- Still sees overall risks to the growth outlook as broadly balanced
- Wage growth should be resilient to a period of slower growth
- Pass-through of wage growth to prices remains relatively muted
The initial comments and the headline is a little bit of a dovish take but the key line in all of this is the one in bold above. That signals that the ECB is still likely to maintain its communique come December and as long as it doesn't shift towards saying that risks is tilted more to the downside then markets shouldn't pay too much attention to his comments here.
