Details of the latest ECB forecasts:
Growth:
- 2017 +1.9% vs +1.8% prior
- 2018 +1.8% vs +1.7% prior
- 2019 +1.7% vs +1.6% prior
The prior forecasts were made in March
Inflation
- 2017 1.5% vs +1.7% prior
- 2018 1.3% vs +1.6% prior
- 2019 1.6% vs 1.7% prior
Draghi said headline inflation would remain around current levels in the coming months. He said that core inflation is yet to show a convincing uptrend.
On inflation, the leak yesterday was that all the inflation numbers would be cut to 1.5%. The 2018 forecast is two ticks lower while 2019 is higher.
On net, it's significantly lower and that's why the euro is selling off.
Core inflation:
- 2018 1.4% vs 1.5% in March
- 2019 1.7% vs 1.8% in March
Oil/euro
- Assumes oil at $51.60 per barrel in 2017 and $51.40 in 2018
- Assumes EUR/USD rate of 1.08 in 2017 and 1.09 in 2018/19
The euro forecasts are up 1-2 cents from March but well below spot at 1.1220.