Monetary policy cycle is coming to an end.Growth outlook broadly stable despite trade conflict.Medium-term inflation stabilizes at target.Financing conditions are no longer restrictive.Private consumption is supporting growth.Defence and infrastructure spending counteract tariffs.Energy prices and the Euro could change in either direction. I expect only limited trade diversion from China to EU.The Euro’s global role is strong, could strengthen further.
Schnabel is generally neutral in her stance as she changes her mind when facts change. She’s not saying much here and just confirming what others ECB members have already said. The ECB expects to cut one last time but will think about that after the summer as they want to gather more information on the state of the economy and the evolution of inflation.
This article was written by Giuseppe Dellamotta at www.forexlive.com.