Nuveen Global Investment Strategist Laura Cooper said in a report that the European Central Bank is likely to leave interest rates unchanged at this week’s meeting after raising them in June, while still signaling a hawkish stance. She said the ECB would remain open to further tightening if renewed tensions push energy prices higher. Cooper pointed to softer-than-feared inflation, little sign of renewed acceleration in the pricing components of purchasing managers’ index, or PMI, data, and producer price figures showing that upstream cost pressures are easing. In her view, those factors support a pause this month. At the same time, she said the situation remains complicated because fresh disruptions to commodity supply could bring back pressure on energy prices just as the ECB is gaining confidence in the path of disinflation.
BlockBeats, July 22 — Laura Cooper, global investment strategist at Nuveen, said in a report that the European Central Bank is likely to keep interest rates unchanged at this week’s meeting after its June rate increase, while maintaining a hawkish policy tone.
Cooper said the ECB would stay open to further tightening if renewed tensions drive energy prices higher.
She said inflation has been more moderate than feared. The pricing components of purchasing managers’ index, or PMI, data show almost no sign of reacceleration, while producer price data confirms that upstream cost pressures are fading. “These factors justify standing pat this month,” she said.
She added that the complication lies in the risk of fresh disruptions to commodity supply, which could revive pressure on energy prices just as the ECB is becoming more confident in the path of falling inflation.
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