ECB likely to bet on inaction again

If the European central bank makes a move in its Thursday’s Governing Council meeting it will be considered a surprise. It will also impact very positively on the euro zone’s stock exchanges.

Mr. Draghi is expected to be more explicit than in previous ocassions regarding eventual devices to face “low inflation”- the word deflation seems to have dissapeared from political and central banks’ leaders’ vocabulary- . Furthermore, he could reiterate that ECB is poised to act in any moment. Last euro area’s manufacturing figures have resulted very positive, which has given the central bank more room to postpone unconventional measures.

“The ECB will not move until European elections in order not to intervene in electoral campaigns,” J. J. Figares at Links Securities says.

According to Renta 4’ s Natalia Aguirre:

“We do not see quantitative stimulus in the form of public debt purchases, but some kind of corporate financing support such as securitizations’ purchases”.

Ms. Lagarde warned on Wednesday that world economy challenges years of weak and low growth ahead, despite having get rid of recession. Without mentioning deflation, but low inflation, she recommeded the ECB to implement a more relaxing monetary policy, including extraordinary initiatives.

According to Bankinter,

“Draghi will bet on forward guidance- since it has worked up today- and also on modulating ECB’s message of confidence about its willingness to act”

“Unconventional mesaures are posible but very complex to apply. Meanwhile a new round of liquidity for financial entities should be forced to be translated to real economy and a Fed-like bonds purchase program is not justified now that European debt’s rates are so low”, Beka finance’ experts assure.