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Pride will keep the ECB sidelined - BAML

Discussion in 'Fundamental Analysis' started by ForexLive, Jan 19, 2016.

  1. ForexLive

    ForexLive Forum Member

    Sep 2, 2015
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    Thursday's meeting is too early for the ECB to get in an activist mood again, BAML says Going back to the drawing board immediately after having delivered another layer of accommodation - even if it was received as insufficient by the market - is not going to be an appealing option for the ECB. True, one could return Draghi's comments straight to him: if a central bank's credibility must be judged by its capacity to deliver on its mandate, here price stability, and not on its willingness to stick to a particular stance or instrument - the point he used to justify the U-turn on the deposit rate - then there is no reason why the Governing Council should request a "decency delay" before acting again if the situation requires it. Still, institutions have their pride, and we suspect that a prejudice to see the December package as sufficient for some time will inform the Governing Council's approach to the news-flow.

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