ECB to chart steady course in March meeting: sources

By Balazs Koranyi

FRANKFURT (Reuters) – European Central Bank policymakers are likely to discuss tweaking their communication stance in their March 8 meeting but no major policy shift is expected, three sources with direct knowledge of the discussion said.

Concerned about recent market turbulence, the strong euro and a dip in both headline and underlying inflation, officials prefer waiting, perhaps until the summer, before starting to signal the end of asset buys, the sources said.

Having bought more than 2 trillion euros worth of bonds to prop up inflation, the ECB is expected to shut its bond purchase scheme by the end of the year, satisfied that robust economic growth will lift consumer prices, even if only slowly.

But the sources said the ECB will want plenty of evidence that inflation will rise, fearing damage to its credibility if it moves too soon and then has to reverse course.

The most ambitious change to be discussed at the meeting could be a proposal to give up the bank’s so-called easing bias, a stipulation that the ECB could increase asset buys if necessary.

While this would be relatively uncontroversial as few if any expect bigger purchases, policymakers rejected such a suggestion in January and the sources said fundamentals had not changed enough since then to make such a tweak certain.

But a broader decision about revamping the bank’s guidance, already flagged for “early” 2018, will not come this month, with some policymakers arguing that such a shift could wait until April or June, the sources said.

The ECB declined to comment on the matter.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.