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5 Jul 2013
Flash: ECB reserved - BTMU
FXstreet.com (London) - Derek Halpenny at The Bank of Tokyo-Mitsubishi UFJ, Ltd The ECB “forward guidance” was certainly a little more reserved.
He went onto say the ‘commitment’ to “keep key policy rates at present or lower levels for an extended period” is open to some interpretation. "This clearly isn’t forward guidance a la the FOMC but the crucial takeaway from this commitment is that the ECB has clearly shown a very clear bias to ease by including the word “lower” and the deposit rate turning negative is still on the table given the commitment included the plural word “rates”. So the willingness of the ECB to convey the potential for more easing is very important and should certainly help anchor yields over the coming months, even if US employment picks up."
He went onto say the ‘commitment’ to “keep key policy rates at present or lower levels for an extended period” is open to some interpretation. "This clearly isn’t forward guidance a la the FOMC but the crucial takeaway from this commitment is that the ECB has clearly shown a very clear bias to ease by including the word “lower” and the deposit rate turning negative is still on the table given the commitment included the plural word “rates”. So the willingness of the ECB to convey the potential for more easing is very important and should certainly help anchor yields over the coming months, even if US employment picks up."