• Reduced room to cut rates further, but macro outlook remains weak and trade tensions could worsen it.
  • Future rate decisions need to be assessed on case by case basis, weighing data, inflation and growth outlook.
  • Essential to maintain pragmatic and flexible approach, closely monitor liquidity conditions.
  • Disinflation has not taken too high a toll on the Eurozone economy and is now close to completion.
  • Outcome of trade negotiations uncertain but impact on European economy bound to be significant.
  • Sectors most exposed to tariffs already showing signs of falling confidence, weaker expectations on orders and employment.

He's a dove but he's sounding more neutral here. The ECB is getting close to its estimated neutral rate, so they are now getting even more data-dependent for further rate reductions.

ECB's Panetta
ECB's Panetta
Source: Forex Live