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ECB Draghi's press conference

European Central Bank announced a package of dovish monetary measures:

  • ECB cut interest rates by 10 bps to 0.15% (versus expected 0.10%) and the deposit rates to -0.1%
  • The regulator will launch quantitative easing (QE) by purchasing asset-based securities (ABS) securities - size of program is still under discusion
  • ECB ends bond purchase sterilization (SMP)
  • ECB will conduct 2 targeted LTRO in September and December 2014, €400 billon each 
  • ECB aims to improve the transmisson mechanisms of monetary policy
  • Draghi said ECB finished with cutting rates. However, further unconventional measures remain on the table. 

ECB forecasts


  • 2014 economic forecast lowered from 1.2% to 1%
  • 2015 forecast revised up from 1.5% to 1.7%
  • There are still risks of a further downside revision


  • 2014 forecast lowered from 1.0% to 0.7%
  • 2015 forecast lowered from 1.3% to 1.1%

EUR/USD fell to $1.3500 on the news, but bounced back to $1.3550. 


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