Ecb’s October policy meeting unlikely to bring new policy signals to table, says Danske bank
Source: FxWire Pro - Commentary / 22 Oct 2018 02:23:26 America/New_York
The European Central Bank (ECB) is not expected to deliver any new policy signals to the table at its monetary policy meeting, scheduled to be held on October 25 by 11:45GMT, according to the latest research report from Danske Bank.
Since the last governing council (GC) meeting, data releases have been on the mark or surprised to the downside. Sentiment indicators have shown signs of stabilising in recent months, but the picture remains mixed and it is too early to declare that we have reached the trough yet.
Core inflation, which is a key component in the ECB's reaction function, surprised on the downside at 0.9 percent in September. Despite little new information on wages, the ECB's wage assessment will be very interesting due to Draghi's relatively hawkish comment at the EP hearing.
Meanwhile, external (trade war, Brexit) and political (Italy) headwinds are still lingering in the background and the ECB acknowledged that downside risks to growth due to the threat of protectionism, vulnerabilities in emerging markets and financial market volatility have become increasingly prominent.
"We still expect GDP growth to remains solid, with lingering downside risks, at 2.0 percent in 2018 and 1.7 percent in 2019. We do not expect October's ECB meeting to be a market mover for EUR/USD. Significant policy changes are still too far on the horizon to grab the FX market's attention," the report commented.© FxWire Pro 2019. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.