An Optimistic ECB | Macro Minutes

  • Thursday, July 21, 2016

Welcome to The Signal’s weekly “Macro Minutes.” Each week, we analyze the most important communications from a specific region and provide insight based on our quantitative analysis of central banks.

7.21.16 Prattle Infographic_ECB_

In Monday’s Review and Preview, Prattle predicted the ECB would hold rates at its policy meeting this week due to the hawkish trend we’d seen in our sentiment data. And hold rates they did.

In a moderately hawkish speech (0.54 raw* score; 0.39 residual),  ECB President Mario Draghi stressed how well the EU has handled the outcome of the Brexit vote, noting that the “financial markets have weathered the spike in uncertainty and volatility with encouraging resilience.” While gesturing towards the possibility of stimulus in the near future–and emphasizing the importance of swift structural reforms “in all euro area countries”–Draghi maintained a largely optimistic tone.

The bottom line: while easing in the near future isn’t out of the question, the ECB appears confident in the EU economy post-Brexit.

The Signal Team

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*Raw scores represent the tone of a communication compared to the average of all communications. Residual scores represent the tone of a communication compared to the rolling, 12-month average for that individual communication type or speaker.