ECB policy remains appropriate, economy growing - ANZ
Analysts at ANZ explained that, last week, the ECB President Draghi reiterated the positive outlook for the euro area economy citing deleveraging, increasingly endogenous growth and signs that the economy is becoming more resilient to shocks, as positive factors for the outlook.
"Bundesbank chief Weidmann spoke too and stressed that accommodative ECB policy remains appropriate and that inflation pressures are expected to remain subdued. Against the backdrop of extraordinary monetary policy, the outlook for growth and risk assets in the euro area remains very encouraging and that may continue to fuel underlying demand from overseas investors, supporting the EUR. However, QE continues to play a distorting role to the business upswing with the yield on the 10-yr bund just 0.36%. This, in an economy that is growing at 2.8% y/y, harmonised inflation at 1.5% y/y and unemployment at 3.6%."