ECB: No change in guard – BBH

Analysts at BBH note that the ECB did not change its policy one iota as asset purchases at the rate of EUR30 bln a month will continue at least through September, and the link to the development of price pressures was maintained.  

Key Quotes

“The hawks, who advocate setting a terminal date for the purchases, do not represent a majority.  Growth is strong, and price pressures still need the extraordinary monetary support, which extends beyond the asset purchases.”

“Draghi sounded as optimistic as ever about the economy.  Given the euro's appreciation since the December ECB meeting and the questions from the reporters, there was no doubt that Draghi would address it.  He did not push back as hard as some would have expected about the euro's strength, which he attributed to the strength of the regional economy and to Mnuchin's comments (without citing Mnuchin by name).  Given the magnitude of the euro's rise before Mnuchin's comments, it would seem Draghi was putting more weight on the former (macroeconomic considerations) than the latter (comments that appeared to violate the rules of engagement).”