ECB Review: 'Hawkish' action, softish language – Danske Bank

Analysts at Danske Bank explain that as expected, the ECB's changed its forward guidance so it no longer entails the QE flexibility.

Key Quotes

“President Mario Draghi struck a softish tone in the press conference, in particular as victory on inflation cannot be declared yet.”

“Overall, our ECB view is not changed based on today's events, as it included little new guidance. Importantly, the decision today was taken unanimously.”

“Staff projections. The near-term growth outlook has strengthened but the ECB's core inflation forecast remains too optimistic.”

“Market reaction: The overall implication was a knee-jerk reaction, with the softish language driving yields and the EUR slightly lower, particularly the comment on inflation on declaring victory.”