Some of the main points from the ECB meeting from Goldman Sachs research.

Lets start with the ‘bottom line’:

  • As widely expected, the ECB left policy rates unchanged at its July meeting
  • Made no announcement of additional policy measures
  • Further details on the ‘mechanics’ of the TLTROs were provided. On a first read, the definition of the benchmarks that determine eligibility for (1) the full four-year period of the first two TLTROs and (2) the amount of borrowing at the second stage of the operations do not look very demanding.
  • ECB announced it would shift its policy meetings to a six-week frequency starting next year and would also start to publish minutes

More:

  • Governing Council acknowledges that inflation will stay low for a prolonged time
  • It expects the measures announced last month to help ease financial conditions further and thereby “contribute to a return of inflation rates to levels closer to 2%”
  • No indication that the Governing Council is leaning towards further measures at this point
  • But, Draghi was at pains to point out that there was unanimity behind the Governing Council’s commitment to do more should the inflation outlook deteriorate unexpectedly
  • Draghi stressed that it would take time for the measures announced in June to work their way through the financial system

On the EURO:

  • When asked during the press conference to what extent the muted reaction of the exchange rate to last month’s announcements was a concern for the Governing Council, Mr. Draghi simply said that the exchange rate was an important factor in assessing the inflation outlook and that the ECB was watching the Euro with “great attention”.
  • He offered no insight into the measures the ECB may take should an appreciation of the Euro again pose a risk to the inflation outlook
  • Draghi also repeated that further technical adjustments of the interest rate corridor would still be possible (and implicitly were seen as compatible with the forward guidance he had announced), and could have an effect on the exchange rate

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(It all sounds like a big, fat, zero to me)