Presser from Draghi

  • Will adjust parameters from Jan 2017

  • Can expand or extend QE is needed

  • ECB will act by using all the instruments within mandate
  • QE extension allows for more market presence
  • ECB will closely monitor inflation
  • Sees continued growth in Q4
  • Sees a moderate and firming pace of growth
  • Forecasts are still tilted to the downside
  • Inflation outlook is broadly unchanged
  • Wants to get CPI to below or close to 2% without delay
  • Structural reforms must be stepped up (here we go with the usual bluster)
  • Other policy actors need to contribute more decisively

The deposit rate comment is a huge dovish signal. They've removed their boundary.

Forecasts;

GDP

  • 2017 1.7% vs 1.6% prior

  • 2018 1.6% unch

  • 2019 1.6%

CPI

  • 2017 1.3% vs 1.2% prior

  • 2018 1.5% vs 1.6% prior

  • 2019 1.7%

That 2017 forecast doesn't look enough to get them tapering next year. More bearish news for the euro.