Greece, economy, bond purchases top agenda of ECB meet

AFP, FRANKFURT: The European Central Bank, bolstered by the success of its controversial bond purchase programme, will pledge to keep it in place while downside risks to economic growth remain, analysts said.
The ECB’s decision-making governing council is scheduled to meet on Wednesday but is unlikely to announce any new policy moves, central bank watchers predicted.
Instead, analysts said they would be listening out for what president Mario Draghi has to say about the effectiveness of the programme so far and about the situation in Greece.
“At its June press conference, the ECB is unlikely to announce any major new policy measures and will argue that its past actions are already yielding results,” said Ben May of Oxford Economics.
In March, the ECB embarked on a programme of so-called quantitative easing or QE, buying up 1.14 trillion euros in assets—at a monthly rate of 60 billion euros per month—until September 2016.
The ECB will also publish Wednesday its latest updated forecasts for growth and inflation in the 19 countries that share the euro.
In early May, executive board member Yves Mersch suggested the forecasts might be raised, said Commerzbank economist Michael Schubert.
“But this is unlikely to occur, given the rather disappointing economic indicators, a higher assumed oil price and a first-quarter growth rate that may be slightly disappointing from the ECB’s perspective,” Schubert said.
The eurozone economy grew by 0.4 per cent in the first three months of this year.
According to the ECB’s last projections published in March, eurozone growth was expected to reach 1.5 per cent in 2015, 1.9 per cent in 2016 and 2.1 per cent in 2017.
“But even with its projections unchanged, the ECB is probably much too optimistic,” said Schubert.
“In consequence, we still expect that the ECB will not only fully implement its QE programme but also be more inclined in case of doubt to extend QE rather than tapering (or phasing it out) prematurely,” he concluded.  

 

Greece, economy, bond purchases top agenda of ECB meet

AFP, FRANKFURT: The European Central Bank, bolstered by the success of its controversial bond purchase programme, will pledge to keep it in place while downside risks to economic growth remain, analysts said. The ECBs decision-making governing council is scheduled to meet on Wednesday but is unlikely to announce any new policy moves, central bank watchers predicted. Instead, analysts said they would be listening out for what president Mario Draghi has to say about the effectiveness of the programme so far and about the situation in Greece. At its June press conference, the ECB is unlikely to announce any major new policy measures and will argue that its past actions are already yielding results, said Ben May of Oxford Economics. In March, the ECB embarked on a programme of so-called quantitative easing or QE, buying up 1.14 trillion euros in assetsat a monthly rate of 60 billion euros per monthuntil September 2016. The ECB will also publish Wednesday its latest updated forecasts for growth and inflation in the 19 countries that share the euro. In early May, executive board member Yves Mersch suggested the forecasts might be raised, said Commerzbank economist Michael Schubert. But this is unlikely to occur, given the rather disappointing economic indicators, a higher assumed oil price and a first-quarter growth rate that may be slightly disappointing from the ECBs perspective, Schubert said. The eurozone economy grew by 0.4 per cent in the first three months of this year. According to the ECBs last projections published in March, eurozone growth was expected to reach 1.5 per cent in 2015, 1.9 per cent in 2016 and 2.1 per cent in 2017. But even with its projections unchanged, the ECB is probably much too optimistic, said Schubert. In consequence, we still expect that the ECB will not only fully implement its QE programme but also be more inclined in case of doubt to extend QE rather than tapering (or phasing it out) prematurely, he concluded.