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ECB and BoJ can and will ease more – Goldman Sachs

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 15, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Research Team at Goldman Sachs, suggests that in the wake of recent disappointments, markets worry that the ECB and BoJ are reneging on their commitments to boost inflation, which has been weighing on risk.

    Key Quotes

    “Both central banks have progressively cut their 2016 core CPI forecasts, fanning fears that they are ‘terming out’ their inflation targets. Indeed, our European Economics team forecasts core HICP at 1.0% this year, below the 1.3% ECB forecast, an illustration of the downside risk to an already low number.

    In our view, the January BoJ meeting demonstrated the BoJ’s ongoing commitment to its inflation target, even as the market has come to doubt the efficacy of its move to negative rates. For both the ECB and BoJ, we expect more stimulus – in addition to their recent easing steps – as opposed to reneging, which is the basis for our 12-month view of $/JPY at 130 and EUR/$ at 0.95.”
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