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5 Jul 2013
Flash: ECB to maintain unchanged rates until 2015? – Deutsche Bank
FXstreet.com (New York) - Returning to the ECB's comment yesterday, Deutsche Bank's Moec and Wall described Draghi's forward guidance as the best way to reconcile – the split between improving real economy data and stubbornly weak credit figures.
Moreover, the pressure on intra-Eurozone spreads partly triggered by Fed communication on tapering and perturbations in the forward money market rates under pressure from early LTRO repayments were of central focus. Stating that the Council expects "the key ECB interest rates to remain at present or lower levels for an extended period of time addresses.
Meanwhile, the message to the money market is strong: negative deposit rates, which had been seemingly downplayed last month, are back on the table. Draghi insisted several times that "all key rates" could be lower. “For now, we maintain their call for unchanged policy rates until 2015, as the latest communication makes an implicit easing bias more explicit but does not reveal a substantially different view.” notes Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank.
Moreover, the pressure on intra-Eurozone spreads partly triggered by Fed communication on tapering and perturbations in the forward money market rates under pressure from early LTRO repayments were of central focus. Stating that the Council expects "the key ECB interest rates to remain at present or lower levels for an extended period of time addresses.
Meanwhile, the message to the money market is strong: negative deposit rates, which had been seemingly downplayed last month, are back on the table. Draghi insisted several times that "all key rates" could be lower. “For now, we maintain their call for unchanged policy rates until 2015, as the latest communication makes an implicit easing bias more explicit but does not reveal a substantially different view.” notes Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank.