5 May 2014
ECB to make a move? – BBH
FXStreet (Guatemala) - Turning to the ECB, Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman explained that most observers recognise that with the small uptick in the flash April CPI and the new staff forecasts not available until June, a move this week is unlikely.
Key Quotes
“A stand pat ECB decision, however, even with the ongoing threats of more dramatic action, could see the euro push higher as the event risk passes."
"New staff forecast for growth and inflation are important, but only for one set of ECB challenges, namely the threat of deflation. We expect the staff forecasts to continue to be consistent with other economists, including the team at the IMF, that indicate little chance of deflation in the euro area as a whole."
"The IMF’s forecasts point to Greece as the only member to experience deflation this year. Also of note, today’s new EU forecasts cut 2014 inflation to 0.8% from 1.0% and the 2015 forecast to 1.2% from 1.3%."
"The staff currently forecasts headline inflation in the euro area at 1.0% this year and 1.3% in 2015. There does not seem to be a compelling case to change these at this juncture."
Key Quotes
“A stand pat ECB decision, however, even with the ongoing threats of more dramatic action, could see the euro push higher as the event risk passes."
"New staff forecast for growth and inflation are important, but only for one set of ECB challenges, namely the threat of deflation. We expect the staff forecasts to continue to be consistent with other economists, including the team at the IMF, that indicate little chance of deflation in the euro area as a whole."
"The IMF’s forecasts point to Greece as the only member to experience deflation this year. Also of note, today’s new EU forecasts cut 2014 inflation to 0.8% from 1.0% and the 2015 forecast to 1.2% from 1.3%."
"The staff currently forecasts headline inflation in the euro area at 1.0% this year and 1.3% in 2015. There does not seem to be a compelling case to change these at this juncture."