FXStreet (Delhi): Research Team at Deutsche Bank, notes that the ECB is ready and willing to act should there arise a need for further stimulus in order to support the Eurozone growth.
Key Quotes
“There is significant uncertainty as to whether the EM crisis has temporary or permanent ramifications for Europe and the ECB will closely monitor this. The rhetoric on willingness to respond was dialed up to “willingness, readiness and capacity to act”.”
“Moreover, none of the Council members discussed the need to change the size, composition and duration of the QE programme. Thus, it seems that rapid change to the QE programme is not in the offing.”
“Our baseline expectation has been that the ECB delivers on its QE plan through to September 2016 and that the risk is skewed towards an expansion or extension of QE. Recent events have increased the risk that the ECB needs to go further.”
“The onus on the one hand will be on the EM story to prove how detrimental it is going to be for Europe, in a direct and/or indirect sense, and on the other hand on the capacity of easy domestic bank credit conditions to compensate for potentially lingering tightness in financial market conditions.”
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