Blue tie, but dovish comments
The ECB held its press conference yesterday:
- As expected, the ECB extended its forward guidance until mid-June.
- TLTRO-III terms were close to our expectations at deposit rate +10bps (basically MRO -30bps) for banks whose eligible net lending exceeds a benchmark.
- Macro-Economic projections did not change significantly. The ranges were revised slightly upwards for 2019 and downwards for 2020, acknowledging better than anticipated growth during first quarter and rising external risks.
- The surprise came during the Q&A, when Mr. Draghi mentioned that some members had raised the possibility of further rate cuts but also new asset purchases.
All in all, the Euro went up as expected but the outcome is more dovish than anticipated. We could be surprised by the next ECB forum in Sintra on June 17-19th.
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