BNY Mellon IM: Commentary on Thursday’s ECB meeting

BNY Mellon IM: Commentary on Thursday’s ECB meeting

20 januari 2020

Monetair beleid ECB
ECB.jpg

By Shamik Dhar, Chief Economist at BNY Mellon Investment Management

The first European Central Bank (ECB) meeting of the new decade is expected to set the tone. Although investors anticipate monetary policy will remain relatively loose, the meeting is expected to address the central bank’s inflation goal and investors will be waiting to see if changes will be made to the inflation target or if a new measure of inflation will make its way onto the agenda for the new year.

Europe just managed to avoid a manufacturing-led recession in 2019 even as European markets, similar to their US cousins, had a strong year. European equities have an opportunity to catch up in valuations with a more stable, albeit slow, economic backdrop. We would expect continued support from the ECB to provide protection against sharp drawdowns and create a friendly environment for equity investors.

Expectations that the ECB will maintain its quantitative easing programme are largely priced in and unless markets were to be given an indication that this would not be the case for 2020 then we could expect little movement in the market. In the long term if the ECB remains vigilant in supporting the region this could make European credit a more appealing investment option with less downside risk than we saw in 2019.

Gerelateerde berichten