ECB – reframing your dreams

The ECB’s adjustment to its inflation targeting framework will require an ‘easier for longer’ policy stance. It might even necessitate more asset purchases if inflation proves tougher to sustain after the post-Covid bounce washes through. But this is not the seismic shift some think it is. Compared to the Fed’s jazzed up framework it looks relatively conservative. It does though add some short-term impetus to the stronger dollar, weaker euro story. And growth dynamics also continue to favour the US. We remain long the US dollar versus the euro.

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