This morning we have had a number of European Central Bank (ECB) members making comments about the economy and the monetary policy of the ECB. De Guindos took the stage first, blaming trade tensions for the weakness in the Eurozone economy. T

hen came Olly Rehn whose comments paint a clearer picture of the monetary policy that is to come from the ECB. Here are Rehn’s comments:

• Need to analyse why inflation has remained low
• We should look at definition of price stability
• Rehn’s view is that 2% is not a ceiling
• Inflation can deviate in both directions from the target
• First rise in interest rates is now further away than it was a few months ago
• Trade tensions are clearly behind the uncertainty eroding economic confidence
• Sees limited impact on inflation from trade tensions
• We should review monetary policy strategy for medium and long-term
• If we face a new recession, we are ready to adjust and use all instruments
• We can judge after new economic forecasts next month on how to adjust policies
• ECB is analysing whether Eurozone soft patch is temporary or not
• Reinvestment of maturing bonds will continue beyond first rate hike
• Will discuss details of new TLTROs in meeting next week
• Ample degree of monetary policy stimulus is appropriate at the moment

His comments are pretty bearish and Olly Rehn might succeed Mario Draghi as the next ECB president soon. The soft patch has been going on for about a year now, so it is not that temporary, but the comments about about the rate hike and the monetary policy revision are pretty bearish.

The markets already know this although – it is weighing on the Euro and I assume it will keep the Euro bearish in the coming sessions.