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11 Mar 2014
Flash: Defensive forward guidance from ECB - RBS
FXStreet (Guatemala) - RBS strategists Richard Barwell noted that the ECB council gave us some defensive forward guidance.
Key Quotes:
“The Council inserted a new clause in the forward guidance on rates in the March 2014 press conference emphasising the degree of slack in the economy”.
“This appears to be a clear signal to markets that good news on growth should not lead to tighter monetary policy. Sustained above trend growth is required to erode that output gap”.
“This latest iteration in the Council's communication strategy is a welcome step, but we are not convinced that it will prove sufficient. Unqualified statements about the output gap cannot be relied upon to keep rate hike expectations under lock and key”
Key Quotes:
“The Council inserted a new clause in the forward guidance on rates in the March 2014 press conference emphasising the degree of slack in the economy”.
“This appears to be a clear signal to markets that good news on growth should not lead to tighter monetary policy. Sustained above trend growth is required to erode that output gap”.
“This latest iteration in the Council's communication strategy is a welcome step, but we are not convinced that it will prove sufficient. Unqualified statements about the output gap cannot be relied upon to keep rate hike expectations under lock and key”