ECB to remain on hold in view of encouraging economic data
Global & Regional Focus Notes
05 March 2014
• We expect the ECB to remain on hold due to encouraging incoming economic data but it is a close call. • Weakness in price developments reflects, to a large extent, external factors, while components pertaining to domestic demand are inching higher. Market data show that inflation expectations remain anchored. • Developments in money markets do not call for immediate action. • Potential negative side effects of policy rate cuts put an obstacle in building consensus in the Governing Council for additional conventional easing.