Echoing the OECD's warnings, ECB Chief Mario Draghi just admitted that its forecasts were way off and revised 2019 growth expectations "substantially" lower (from 1.7% to +1.1%) and slashed all inflation forecasts.
Headlines so far include:
*DRAGHI: INCOMING DATA REMAINS WEAK, PARTICULARLY MANUFACTURING
*DRAGHI SAYS RISKS TO ECONOMIC OUTLOOK STILL TILTED TO DOWNSIDE
*DRAGHI SAYS 2019 GDP FORECAST REVISION IS 'SUBSTANTIAL'
*ECB SEES 2019 GDP GROWTH AT 1.1 VS. 1.7%
*ECB SEES 2020 GDP GROWTH AT 1.6 VS. 1.7%
*ECB SEES 2021 GDP GROWTH AT 1.5 VS. 1.5%
*ECB SEES 2019 INFLATION AT 1.2 VS. 1.6%
*ECB SEES 2020 INFLATION AT 1.5 VS. 1.7%
*ECB SEES 2021 INFLATION AT 1.6 VS. 1.8%
And Draghi's key dovish responses:
" While there are signs that some of the idiosyncratic domestic factors dampening growth are starting to fade, the weakening in economic data points to a sizeable moderation in the pace of the economic expansion that will extend into the current year.
The persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets appears to be leaving marks on economic sentiment
Underlying inflation continues to be muted. The weaker economic momentum is slowing the adjustment of inflation towards our aim.
Today’s decisions will support the further build-up of domestic price pressures and headline inflation developments over the medium term
In any event, the Governing Council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation continues to move towards the Governing Council’s inflation aim in a sustained manner
Euro area expansion will continue to be supported by favourable financing conditions, further employment gains and rising wages, and the ongoing – albeit somewhat slower – expansion in global activity
The risks surrounding the euro area growth outlook are still tilted to the downside, on account of the persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets.”
And Bund yields are testing 2019 lows...