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31 Mar 2014
ECB approaches and inflation is a concern - Rabobank
FXStreet (Guatemala) - Strategists at Rabobank explained that the recent drop in EZ inflation is somewhat of a concern to the ECB.
Key Quotes:
“The most recent inflation numbers in the Eurozone (0.5% headline for March) are, once again, severely testing the ECB’s resolve ‘to sit through’ the recent bout of disinflation”.
“The fall in inflation is largely due to factors that are beyond the ECB’s control. In short, a sharp-tongued ECB President could cope with this setback”.
“After all, last month, ECB president Mario Draghi indicated that a meaningful departure from its baseline scenario would be required for the ECB to be spurred into action. Holding ECB Staff Projections as evidence, it was as if Draghi was saying that as long as the future trajectory for inflation is sufficiently upward sloping, the ECB has no reason to be concerned”.
“Meanwhile, economic data still confirm that the gradual economic recovery is continuing. In fact, the latest PMI survey’s for March support the view that is broadening across the whole region. So no serious problem for Mr. Draghi there”.
Key Quotes:
“The most recent inflation numbers in the Eurozone (0.5% headline for March) are, once again, severely testing the ECB’s resolve ‘to sit through’ the recent bout of disinflation”.
“The fall in inflation is largely due to factors that are beyond the ECB’s control. In short, a sharp-tongued ECB President could cope with this setback”.
“After all, last month, ECB president Mario Draghi indicated that a meaningful departure from its baseline scenario would be required for the ECB to be spurred into action. Holding ECB Staff Projections as evidence, it was as if Draghi was saying that as long as the future trajectory for inflation is sufficiently upward sloping, the ECB has no reason to be concerned”.
“Meanwhile, economic data still confirm that the gradual economic recovery is continuing. In fact, the latest PMI survey’s for March support the view that is broadening across the whole region. So no serious problem for Mr. Draghi there”.