This meeting by the European Central Bank has been eagerly awaited from traders and analysts. Everyone was expecting the ECB to turn dovish today, considering the really weak economic data recently, especially from the manufacturing sector, which the ECB did. Here are some of their comments:

Statement

• Data point to somewhat weaker growth in Q3 and Q4
• Inflation pressures muted
• We have tasked Eurosystem Committees to examine options
• Weakness primarily due to softer global growth, and hurting Eurozone manufacturing
• Significant monetary stimulus is needed
• Risks around growth outlook are still tilted to the downside, relating to uncertainty and protectionism
• Inflation likely to decline in coming months but will rise near year-end
• Underlying inflation muted
• Cross-check confirms that ample degree of monetary policy accommodation is still needed

Press Conference

• Outlook is getting worse and worse
• Previous forecasts showed rebound in Q2 but now incoming signs show weakness
• The balance of risks is on the downside
• The prolonging of uncertainty is a materializing of risks
• Draghi highlights easing bias and high degree of optionality
• We don’t like what we see on the inflation front
• Any rate cut would come with mitigating measures
• No discussion about cutting rates today
• Want to see next round of projections before taking action
• It’s difficult to be gloomy today
• The risk of recession is pretty low

So, everything here is dovish, but as we said, markets were expecting this. What traders wanted to hear is a set date for the coming rate cut and pledges to keep cutting them until things get better. But, the ECB remained in a wait-and-see mode today and the Euro has ended up higher. Although, i would look to sell the rebound in the Euro because after all, the ECB has turned really dovish, it’s just that they held off this time.