FXWire Pro Headline | February 11 2013 8:25 EST
Quotes from Societe Generale Cross Asset Research:
-Comments by ECB President Draghi at last week's press conference were widely interpreted as a hint that policy moves might be forthcoming if the euro continues to appreciate (cf. ECB deftly heads off euro appreciation). While reiterating that the goal of the ECB is price and not exchange rate stability, Mr. Draghi added "We want to see if this appreciation is sustained and if it alters our assessment of price stability". However, we detected no increased concerns over growth, with risks remaining firmly on the downside.
-To our minds, a material deteriorating of the growth and inflation outlook would be needed for the ECB to consider further rate cuts (at current levels we see a potential 0.2pp knocked off growth). Still, given that the ECB's balance sheet is the only one to contract and given its institutional setting (no QE