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27 Mar 2014
Deflationary risks played down by ECB - BBH
FXStreet (Guatemala) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman explained that ECB officials may play down the deflationary risks.
Key Quotes:
"ECB officials may play down the risk of deflation, but the market remains unconvinced. Today's money supply growth and lending data give no reason to expect this to change anytime soon."
"Money supply growth itself rose 1.3% in February from a year ago, and although this is an improvement over 1.2% in January, it is too little monetary fuel for a sustained recovery. There was also another drop in lending (-2.2%) to the private sector. This is to say that the transmission mechanism is still broken."
Key Quotes:
"ECB officials may play down the risk of deflation, but the market remains unconvinced. Today's money supply growth and lending data give no reason to expect this to change anytime soon."
"Money supply growth itself rose 1.3% in February from a year ago, and although this is an improvement over 1.2% in January, it is too little monetary fuel for a sustained recovery. There was also another drop in lending (-2.2%) to the private sector. This is to say that the transmission mechanism is still broken."