ECB: Departure from under-promising and over-delivering - ING

FXStreet (Delhi) – Research Team at ING, suggests that the ECB’s departure from “under-promising” and “over-delivering” has delivered a shock to markets, used to getting their way with central banks.

Key Quotes

“Meanwhile, the Federal Reserve has still failed to convince all investors of its intention to hike on 16 December, after nearly a decade of zero rates. A sea-change in sentiment beckons as questions about the ECB’s ability and intention to keep easing re-emerge, while the Fed tries to start lift-off while restraining expectations for future hikes.”

“With growth holding up well, the ECB eventually had second thoughts regarding the need for major additional stimulus, thereby disappointing financial markets that had hoped for more. That said, while the ECB is now unlikely to lower rates any further, the continuing liquidity injections and the lower deposit rate are likely to keep money market rates below zero % until the end of 2017.”