Threadneedle: EZB schlägt neue Marschrichtung ein

“The ECB made a potentially significant change of approach at their April meeting, stating for the first time that quantitative easing is a realistic policy prospect in coming months. Previously, Mario Draghi had refused to be pinned down on the viability of such a policy, but the persistent undershooting of inflation data in recent months has heightened the governing council’s alertness. Whereas deflation risk is still minimal in the ECB’s opinion, the prospect of prolonged below-target inflation also threatens the mandate, and Draghi was keen to point out that the ECB stands ready to defend against this. The Euro exchange rate also received extra column inches in the introductory statement, and the verbal threat of unconventional measures likely has the currency in mind, given that the Euro has remained strong in spite of divergent interest rate expectations versus other economies. In truth, the introduction of quantitative easing is still a distant prospect but the fact that QE has entered the discussion is a welcome progression which in many investors’ eyes is long overdue.”