FXStreet (Edinburgh) - Analysts at Danske Bank see the possibility that the ECB could extend its current ‘quantitative easing’ programme beyond the original date of September 16th.
Key Quotes
“ECB President Draghi was very dovish at the latest meeting at the beginning of September and based on this we expect the ECB to extend QE purchases beyond September 2016”.
“Our changed expectation comes mainly from the fact that the ECB now projects headline inflation to be only around 0.9% in Q2 16 and 1.2% in Q3 16 when the ECB is set to end QE purchases”.
“In our view, the ECB will continue its purchases if inflation is around these levels and we continue to believe that the ECB is too optimistic on its outlook for core inflation, as slack in the labour market will still be a headwind to higher wage growth in 2016”.
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