MNI BRIEF: Fed's Goolsbee Taking Job Gains With Grain Of Salt

BRIEF: EU Says Engaging With China Over EV Trade Dispute

MNI BRIEF: Draghi Calls For Tariffs, Subsidies Against China

MNI BRIEF: China May M2 Slows To Record Low Again

MNI: PBOC Conducts CNY2 Bln Via OMO Fri; Liquidity Unchanged

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS FRI

US Treasury Auction Calendar

MNI: BAKER HUGHES US RIG COUNT 590; OIL RIGS 488; GAS RIGS 98

EZ/UK Bond Supply Calendar: Slovakia, Belgium, BoE APF Monday

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Summary of Sell-Side Views on ECB Strategy Review (2/2)

ECB VIEW
  • Citi: Expects the outcome of the ECB strategy review to confirm what we consider to be already policy, in particular that it pursued a 2% symmetric inflation objective, with more aversion for continued undershooting than moderate overshooting. We expect however the ECB to fall short of explicitly committing to inflation overshoot but rather to convey a willingness to tolerate some overshooting. That would legitimise a reinforced forward guidance, with more emphasis on realised inflation, but would not suggest a return to a more forceful policy of yield curve control or capping. So whichever approach prevails in the outcome of the strategy review, it seems likely to us that it comes with what may appear as "dovish" announcements. But we stress that if we are right that the ECB falls short of an explicit commitment to run the economy hot, that dovishness is more form than substance, and may confirm a policy direction that was already implicit, as opposed to altering it in a meaningful way.
  • Goldman Sachs: "We think the direction of yields will be determined by risks around the ECB strategy review and the macro outlook, both of which we expect will push yields higher to year-end."
  • Nomura: "AIT would be the most dovish of scenarios and would mean even more monetary policy support than we currently expect, particularly with the ECB forecasting HICP inflation to undershoot 2% inflation for some years to come from 2022 onwards."
  • RBC: "we expect something that can be interpreted as being akin to an average inflation target without specifically saying so (see here) and stress that how strongly this wriggle room for overshoots is will be the crucial piece of the puzzle when the actual announcement comes."
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
Homepagemarkets-real-timeBulletMarketsFixed Income BulletsForeign Exchange Bullets

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.