Nordea Research discusses its reaction to today's ECB policy decision and notes that Italy continues to exert downward pressure on the euro and German yields as President Draghi did not offer a helping hand to Italy at today's press conference.
"In the Q&A, most questions centred on Italy, but Draghi did not provide any new insights into the topic. The ECB sees the Italian case as primarily a fiscal issue, not a monetary one. Draghi also reminded that outright monetary transactions (OMT) programme remains available. In conclusion, the ECB is not about to run to Italy’s rescue, even if market conditions deteriorated further," Nordea notes.
"There was little new information from the ECB at the October meeting, certainly no new monetary policy signals. We see little reason to change our call of the first rate hike taking place in December 2019. The net asset purchases are very likely to end at the end of 2018," Nordea adds.