A rate-hike response by the ECB would not have achieved much [and would have been] counter-productive in slowing European growth. |
I don't think the ECB will cut rates today simply because they're still trying to get a grasp on what happenings in the EMU economy and secondly because the softer euro is doing some of the policy relaxation for them. |
The problem is that the markets were so pessimistic at the start of the year that they now risk overshooting in the other direction. If these [heightened] expectations take hold, there is a danger that they could push up the euro too fast. |
There is clearly more tightening just around the corner. |
We have been here before. |