FXStreet (Delhi) – Research Team at Rabobank, suggest that due to slowing demand and weak investment, ECB is likely to launch a fresh round of stimulus measures as early as December to support the ailing growth.
Key Quotes
“We remain reticent to see the slowdown in emerging markets and its ensuing decline in commodity prices as being unequivocally negative for the Eurozone. In fact, we may well see this as a support to growth over the medium-term.”
“Nevertheless, the ECB is likely to attach more weight to the challenges that the Eurozone economy faces in the short-term, in the form of slowing external demand and weak investment. As such, tighter financial conditions and falling inflation expectations may force the ECB to ‘up the ante’ as early as December.”
“Limited room for (deposit) rate adjustment and our expectation of a modest (30-50bn) take-up in TLTRO5 will only underscore the need to focus on the ECB’s asset purchase programs.”
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