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    Smets (ECB) on Belgian cen. bank projections + Liikanen (ECB)

    National Bank of Belgium released its new projections and its governor Jan Smets uses this opportunity to comment on monetary policy

    • 2016 HICP forecast down from 1.9 to 1.6%; 2017 up from 1.7% to 1.8%
    • unit labour costs likely to fall 0.3% in 2016 (bad for inflation prospects) and rebound later
    • there is no evidence that inflation expectations get entrenched at low levels
    • but we need to stay vigilant for all such signals
    • we are not in a new decision moment for the ECB

     

     

    We also had some quotes from another ECB member Liikanen:

    • it is crucual that cpi does not get entrenched in second round effects
    • inflation remains subdued and long term expectations are still low.

     

    Not the first time ECB members repeat the same (and quite vague) key messages following a meeting. Market tolerance for nothing new from the ECB may be getting thinner unless there is some rebound in the data soon.

     

    Any person acting on this information does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.


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