10 Mar 2016
ECB, all in all...not good enough - ING
Carsten Brzeski, analyst at ING explained , that all in all, the ECB delivered more than market participants had expected.
Key Quotes:
"Particularly the part in which the ECB will now actually pay banks for borrowing money came as a surprise. Still, the rebound of the euro exchange rate after comments by Draghi that the ECB could not cut rates as low as it wanted indicates that betting on a weaker euro as the outcome of today’s meeting is risky.
Instead, the ECB will hope that this time around the attempt to revive lending and thereby investment will finally work. It is a long shot with an uncertain outcome. We are hesitant to say that this was it.
The ECB is clearly determined to continue fighting. Admitting impotence does not seem to be an option. Whether this fight, without support by governments and fiscal policies, will really lead to a victory against stagnation and oil price driven low inflation rates remains doubtful."
Key Quotes:
"Particularly the part in which the ECB will now actually pay banks for borrowing money came as a surprise. Still, the rebound of the euro exchange rate after comments by Draghi that the ECB could not cut rates as low as it wanted indicates that betting on a weaker euro as the outcome of today’s meeting is risky.
Instead, the ECB will hope that this time around the attempt to revive lending and thereby investment will finally work. It is a long shot with an uncertain outcome. We are hesitant to say that this was it.
The ECB is clearly determined to continue fighting. Admitting impotence does not seem to be an option. Whether this fight, without support by governments and fiscal policies, will really lead to a victory against stagnation and oil price driven low inflation rates remains doubtful."