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Blue tie, but dovish comments

07 June 2019

The ECB held its press conference yesterday:

Blue tie, but dovish comments
  • 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. 


Disclaimer
This commentary is intended for professional investors within the meaning of MiFID II. It is provided for informational and educational purposes only and is not intended to serve as a forecast, research product or investment advice and should not be construed as such. It may not constitute investment advice or an offer, invitation or recommendation to invest in particular investments or to adopt any investment strategy. Past performance is not indicative of future performance. The opinions expressed by La Française Group are based on current market conditions and are subject to change without notice. These opinions may differ from those of other investment professionals. Published by La Française AM Finance Services, head office located at 128 boulevard Raspail, 75006 Paris, France, a company regulated by the Autorité de Contrôle Prudentiel as an investment services provider, no. 18673 X, a subsidiary of La Française. La Française Asset Management was approved by the AMF under no. GP97076 on 1 July 1997.

 

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