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Draghi thinks more action is necessary - BBH

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Córdoba) - Analysts from Brown Brother Harriman, noted that Mario Draghi, ECB president, opened the door to more stimulus, including the possibility of more rate cuts.

    Key Quotes:

    “Draghi embraced and defended the ECB's action but clearly and unequivocally opened the door wide for more action. By indicating that rates will remain at current low level of lower is a signal that the -30 bp deposit rate has not exhausted room for more cuts.”

    “He asserted that the ECB has the "power, determination and willingness" to act. This is important because some have argued that the mild action in December meant that the ECB no longer had the will or means to take bolder action. Draghi is trying to refute this impression.”

    “Moreover, Draghi argues that the downside risks have materialized in recent weeks. The worsening of the conditions requires a review and reassessment of the ECB's stance. Review is straightforward. It is evaluating the impact of the actions. The reassessment refers to deciding whether more action is needed. It is clear that Draghi thinks it is necessary.”
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