FXStreet (Delhi) – Matteo Leombroni, Research Analyst at Goldman Sachs, notes that Mr. Draghi has signalled that the ECB is prepared to act in order to see inflation return to target.
Key Quotes
“At a speech in Frankfurt this morning, Mr Draghi struck a dovish tone, stating that ‘if we conclude that the balance of risks to our medium-term price stability objective is skewed to the downside, we will act by using all the instruments available within our mandate’. The ECB president went on to mention the scope of the ECB to use both the Asset Purchase Program (APP) and the deposit rate to return inflation to target ‘as quickly as possible’.”
“We expect the ECB to cut the deposit rate by 10bp and to extend the APP (by an extra €500bn compared to the program ending in Q3 2016) at the December meeting.”
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