Mario Draghi says the ECB is looking at options to 'drive QE forward' but told a news conference that extending QE had not been discussed at this week's monetary policy meeting. David Pollard reports.
There was no surprise at this meeting's decision - rates on hold - QE asset purchases left at 80 billion euros a month until March. But would Mario Draghi make dovish signals as to what might come next? Markets took it as a 'no' - or at least 'not yet' - when Draghi was asked if extending QE had been considered. SOUNDBITE (English) MARIO DRAGHI, ECB PRESIDENT, SAYING: "We discussed the assessment of the economy and the broad macro-economic projections. But we didn't discuss anything else." That drove shares down as traders mulled an economy that - for some - is only inching forward - despite negative rates and bond purchases that, last week, passed the one trillion euros mark. SOUNDBITE (English) JP MORGAN, GLOBAL MARKET STRATEGIST, NANDINI RAMAKRISHAN, SAYING: "Overall, growth in the euro zone hasn't necessarily been above trend or been above 1.5 or 2 or even higher, 3 per cent growth which of course a central bank with cutting interest rates so low and buying so many bonds, both government and corporate, would hope to see a bit more growth." And in fact the ECB is revising down its growth forecast next year - though only fractionally - to 1.6 per cent - whilst warning of downside risks. The ECB chief making it plain that fiscal policy had its part to play too. A well-worn theme - though this time singling out Europe's biggest economy. SOUNDBITE (English) MARIO DRAGHI, ECB PRESIDENT, SAYING: "As I said before, countries that have fiscal space should use it. Germany has fiscal space." But monetary policy is working, Draghi asserted. And ECB inflation projections were left broadly unchanged. Even as the bank - in its usual mantra - says it's ready to use all instruments within its mandate. Including extending QE if necessary.