Novosti Evropske centralne banke

• expects eurozone inflation to continue to slow in the next few months

• ECB will be prudent in setting monetary policy

• The persistence of uncertainties relating to geopolitical factors and the threat of protectionism is weighing on economic sentiment.

• Supportive financing conditions, favourable labour market dynamics and rising wage growth continue to underpin the euro area expansion and gradually rising inflation pressures.

• Significant monetary policy stimulus remains essential to support the further build-up of domestic price pressures and headline inflation developments over the medium term.

• The global economic growth momentum has slowed recently amid geopolitical uncertainties and vulnerabilities in emerging markets.

• Global trade decelerated towards the end of 2018 as downside risks related to unresolved trade disputes remained prominent and growth in emerging markets slowed down.

• While financial conditions are favourable overall, the weaker global growth momentum has fuelled stock market volatility.

• A more accommodative monetary policy stance has been taken in China in the light of the slowing growth momentum.

• Euro area real GDP increased by 0.2%, quarter on quarter, in the third quarter of 2018, following growth of 0.4% in the previous two quarters.

• Incoming data have continued to be weaker than expected resulting from a slowdown in external demand which was compounded by several country and sector-specific factors.

• While the impact of some of these factors is expected to fade, the near-term growth momentum is likely to be weaker than previously anticipated.

• Looking ahead, the euro area expansion will continue to be supported by favourable financing conditions, further employment

EUR/USD falls, to more-than-two-week low of 1.1530 reached late last week, after downbeat comments from European Central Bank President Mario Draghi. Speaking at the ECB forum in Sintra, Portugal, he said "uncertainty surrounding the eurozone growth outlook has recently increased".

• News Are Still Good, But Not as Good as Before

• We See Uncertainty

• We Do Not Want to Underplay the Existing Risks

• Soft Patch May Extend into 2Q

• Rising Wage Growth Will Help Drive Up Underlying Inflation

• ECB Staff Sees 2019 HICP +1.7% YY vs March Estimate of +1.4%

• Underlying Inflation Expected to Rise Gradually Over Medium Term

• Headline Inflation Likely to Hover Around Current Level in Rest of 2018

• ECB Staff Sees 2019 GDP +1.9% YY vs March Estimate of +1.9%

• ECB Staff Sees 2020 GDP +1.7% YY vs March Estimate of +1.7%

• Risks Related to Global Factors Have Become "More Prominent"

• Global Expansion Providing Impetus to Eurozone Exports

"The Governing Council decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019 and in any case for as long as necessary to ensure that the evolution of inflation remains aligned with the current expectations of a sustained adjustment path".

• Says without doubt our communication will be adjusted given that current rates guidance is explicitly conditioned on the end of net asset purchases

• Need for some form of common stabilisation function to prevent countries from diverging too much during crises

• What is still missing, however, is a backstop for the single resolution fund

• People expect the euro to deliver the stability and prosperity it promised

The European Central Bank (ECB) Vice President Vitor Constancio said on Wednesday that negative deposit rates has limits, adding that the central bank should monitor "the possible occurrence of undesirable side-effects".

He also said that inflation in 2018 could be higher that estimated by the ECB.

Constancion pointed out that the central bank would continue to implement its stimulus measures.

The European Central Bank (ECB) purchased €17.73 billion of government and agency bonds under its quantitative-easing program last week.

The ECB bought €1.49 billion of covered bonds, and €131 million of asset-backed securities.

The central bank purchased €348 million of corporate bonds on June 08.

The ECB cut its interest rate to 0.00% from 0.05% and deposit rate to -0.4% from -0.3% at its March monetary policy meeting. The ECB also expanded its monthly purchases to €80 billion from €60 billion.

The European Central Bank (ECB) Governing Council member Jens Weidmann said on Monday that there was no need for more stimulus measures, adding that the current stimulus measures needed more time to take effect.

"The current monetary environment requires no further easing," he said.

Weidmann noted that the ECB's quantitative easing was appropriate as inflation was low. But he pointed out that the risks and side effects of the stimulus measures would rise over time.

The European Central Bank (ECB) Governing Council member Jens Weidmann said on Friday that the central bank's low-interest-rate policy for a longer period could lead to a sudden hike in risk premiums.

"Monetary policymakers have to take this into account in order to avoid unintended consequences," he added.

Weidmann pointed out that the ECB should consider financial imbalances.

"Monetary policy would be wise to take the implications of financial imbalances for price stability into account," he noted.