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Goldman: no ECB easing in March

Strategists at Goldman Sachs don't expect additional easing from the ECB today given last week’s higher-than-expected inflation data (CPI +0.8% vs. prior +0.7%). However, they expect ECB to announce in the sterilization of SMP liquidity, in the context of the 2016 inflation forecast, which at 1.6% will still fall short the “slightly below” 2% inflation target.

"Looking ahead to April, we continue to expect a 15 bps cut in the MRO and deposit rates, spurred on by a drop in March inflation on a base effect from last year rolling off. In the big picture, therefore, we think there is further easing from the ECB in the pipeline," GS projects.

As for the EUR/USD prospects, analysts say: “Material EUR downside will only emerge if the ECB changes communication (or obviously eases more aggressively) and/or if US data improve."

 

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