Meldung vom 12.09.2017

UNIQA Capital Markets Weekly

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  •  Monetary policy unchanged in September but re-calibration expected during autumn.
  • “Patience is needed” with regards to inflation.



Pressetext (5270 Zeichen)Plaintext



  • Monetary policy unchanged in September but re-calibration expected during autumn.
  • “Patience is needed” with regards to inflation.


As widely expected, the governing council (GC) of the European Central Bank (ECB) decided that the interest rate on the main refinancing rate and the interest rates on the marginal lending facility and the deposit facility remain unchanged at 0.0 %, 0.25 % and -0.4 % at last week’s meeting. The pivotal forward-looking message about the course of monetary policy was also left unchanged stating that “the GC expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases.”


Regarding the unconventional monetary policy measures, the GC confirmed that the net asset purchases, at the current monthly pace of 60 bn EUR, are intended to run until the end of December 2017, or beyond, if necessary, and in any case until the GC sees a sustained adjustment in the path of inflation consistent with its inflation aim. The GC left its threat unchanged to loosen monetary policy further in case of unfavourable developments: “If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the GC stands ready to increase the programme in terms of size and/or duration.”


The economic expansion in the Eurozone continues to be solid and broad-based across countries and sectors, although it has yet to translate into stronger inflation dynamics, according to the ECB. Measures of underlying inflation remain at subdued levels and a “very substantial degree” of monetary accommodation is still needed for underlying inflation pressures to gradually build up. While preliminary discussions about the length and the size of the asset purchase programmes (‘QE’) took place during the GC meeting and committees were tasked to work on scenarios, the ECB reiterated that in autumn (October) it will decide on the calibration of the policy instruments beyond the end of the year. Most likely, the ECB is going to announce a reduction in monthly asset purchases (f. ex. to 40 bn EUR) and a time period (f. ex. running until mid-2018).


In its updated quarterly staff macroeconomic projections, the ECB foresees Euro Area real GDP increasing by 2.2 %, 1.8 % and 1.7 % in 2017-2019. Annual inflation (central tendency) is forecast at 1.5 %, 1.2 % and 1.5 % for 2017-19  



Compared to the previous release (June), the inflation rate is projected 0.1 percentage points lower for 2018 and 2019, respectively. The downward revision mainly reflects the recent appreciation of the Euro nominal exchange rate by around 4 % since May/June. With respected to the recent volatility in the exchange rate, President Draghi said that it “represents a source of uncertainty which requires monitoring with regard to its possible implications for the medium-term outlook for price stability.” Measures of underlying inflation have ticked up moderately in recent months, but have yet to show convincing sings of a sustained upward trend. Domestic cost pressures, notably from labor markets, are still subdued.[1] “Patience is needed”, as Draghi stated during the Q&A session.




Poland: Central bank reference rate is kept at 1.5 %; core inflation remains low in spite of a tightening labor market


Besides the ECB, also the Polish central bank has kept interest rates unchanged. The main reference rate remains at 1.5 %, since the last rate decline in March 2015, and the deposit rate is kept above the zero lower bound at 0.5 %.


Prices of goods and services increased by 1.8 % (y/y) in August which implies an inflation rate of 1.9 % since the beginning of the year. This is below the central bank’s inflation target of 2.5 % but within its fluctuation band of +/-1 % point. Core inflation (excl. food and energy prices) has gained some momentum in H1 17 but has stabilized, since then, and remains at a low level of 0.8 %.


This is, in spite of, a tightening labor market. Since the beginning of the year wages have increased by 4.5 % (y/y) in nominal and 2.8 % (y/y) in real terms. The unemployment rate is on a declining trend reaching 4.8 % in July and employment has been growing at an average of 4.5 % in 2017. We expect the labor market to gradually increase inflationary pressure.[2]


The positive effects of a sound labor market can also be observed in GDP growth. GDP increased by 4.4 % (y/y) in Q2 17 after 4.2 % (y/y) in Q1 17.  Economic growth continues to be supported by solid growth in private consumption expenditure contributing 3.1 %-points to GDP growth in H1 17. Investment has not yet picked up but positive changes in inventories have contributed positively to growth, particularly in Q2 17. In spite of the accelerated growth in the global economy, export growth has decelerated leading to a negative contribution of net exports in H1


[2]According to estimates of the Polish central bank, the unemployment rate is already below the NAWRU (non- accelerating wage rate of unemployment) of 5.6 % for 2017.





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