Danske Bank expect no fuss from ECB meeting


Danske bank, ECB, Greece, QE, Mario Draghi, ECB meeting15 July, AtoZForex.com, Limassol – The Danske Bank foresees a relatively calm projection on this week’s European Central Bank’s (ECB) Press Conference meeting, with an expectation of a very limited financial market impact.

The Press Conference arranged on Thursday 12:30 GMT is one of the eight scheduled annually. It is the main method for the ECB to communicate with investors regarding monetary policy. It covers in detail the factors that had affected the most recent interest rate and other policy decisions, like inflation and economic outlook. Moreover, clues regarding future monetary policy are expected at this meeting.

The Danske Bank expects both policy and communication about the policy, with full implementation of QE program, outlook to remain unchanged and for most questions to be focused on Greece, thus, “we believe the market impact of Thursday’s ECB meeting is likely to be very limited,” pointed out by the Dankse Bank.

Ten-year Bund yields and periphery spreads are currently approximately the same level as before the Greek referendum was called on 26 June. Although Greek newspaper headings have shaped the financial markets over the past three weeks in particular, movements have been significantly shorter than those around previous Greek bail-out negotiations (see charts below), says Danske Bank.

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Danske Bank

“Thus, we think it will require Mario Draghi to reveal new details on the ECB emergency toolbox to move the markets significantly and this does not seem likely,” the Danske Bank expects. After markets had welcomed the deal on Monday, it proved once more to be sufficient for the ECB to do nothing but state its readiness to act.

Read also: Nomura RBNZ rates cuts

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