8 Nov 2013
Flash: ECB to be more credible when facing downside risks? - Nomura
FXstreet.com (Barcelona) - According to European Economist for Nomura Nick Matthews, after the decisive action taken by the ECB to cut rates on Thursday, markets are likely to change the perception towards the ECB when faced with downside risk.
Key Quotes
"While we do not think the decision to cut today reflects a change in the ECB‟s reaction function, it will likely result in the market being more willing to believe the ECB will do what is necessary when confronted with downside risks."
"We think it unlikely that the ECB will make any further changes to policy before March 2014 at the earliest, but we remain biased towards more action given our continued concern over risks of inflation being too low."
Key Quotes
"While we do not think the decision to cut today reflects a change in the ECB‟s reaction function, it will likely result in the market being more willing to believe the ECB will do what is necessary when confronted with downside risks."
"We think it unlikely that the ECB will make any further changes to policy before March 2014 at the earliest, but we remain biased towards more action given our continued concern over risks of inflation being too low."