ECB: Expect QE to continue in 2018 – Danske Bank

Pernille Bomholdt Henneberg, Chief Analyst at Danske Bank, notes that recently, Draghi communicated that the ECB has not yet seen sufficient evidence to alter materially the assessment of the inflation outlook and related to this, the ECB has continually said there are no signs yet of a convincing upward trend in underlying inflation.

Key Quotes

“In the minutes from the latest ECB meeting, it was said that the linchpin for higher underlying inflation was a turnaround in wage dynamics. In our view, the ECB is very optimistic in its wage growth projection and with a lowering of the forecast we expect the ECB to announce an extension of QE purchases into 2018”