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Further rate cuts are expected by the ECB – BBH

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 27, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Edinburgh) - The research team at BBH sees the European Central Bank lowering further its already negative deposit rates at its meeting next week.

    Key Quotes

    “The ECB is focused what it sees as too slow of an improvement on inflation”.

    “The market expects a deeper push into negative territory with the deposit rate (perhaps a two-tier system, which seems to us to punish German and French banks which among the largest depositors at the ECB), increased asset purchases, and a six-month extension of the purchase program”.

    “Although it has been suggested that the ECB could buy sub-sovereign debt or even distressed loans, we are not convinced that an agreement on these can be hammered out. However, the ECB could increase the agencies that qualify”.
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