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ECB hardliner Weidmann comes in from the cold as deflation threatens

By Paul Carrel FRANKFURT (Reuters) - As recently as last November, Jens Weidmann steadfastly opposed any move by the European Central Bank to print money to buy assets and buoy the euro zone economy. No longer. The Bundesbank chief, known for his hardline stances at the ECB and as head of the German central bank, is now ready to support such quantitative easing (QE) if he and his ECB colleagues deem it necessary.

Low inflation to linger for years in euro zone

By Sumanta Dey (Reuters) - The euro zone is set for at least two more years of low inflation, held down by a strong currency and anemic economic and jobs growth, and still faces a very real threat of deflation, a Reuters poll showed on Wednesday. While the inflation forecasts are mostly in line with the European Central Bank's predictions, they show the difficulty the bank will have in reversing the trend of falling inflation given that its key interest rates are already at or near zero.

Euro strength here to stay, unless ECB steps in

By Anirban Nag and Eva Taylor LONDON/FRANKFURT (Reuters) - Many of the factors driving the euro exchange rate to levels that have set off alarm bells at the European Central Bank are unlikely to go away on their own, part of the reason the bank has been threatening action. The euro is still off the peaks of 2011, but because inflation is now heading close to zero, the ECB is sensitive to its current rate because anything that makes it stronger pushes deflation nearer.

Euro zone inflation sticks in 'danger zone', keeps ECB under pressure

BRUSSELS (Reuters) - A drop in March euro zone inflation to its lowest level since November 2009 was confirmed on Wednesday, keeping pressure on the European Central Bank to intervene if prices do not rebound. The year-on-year inflation rate in the 18 countries sharing the euro was 0.5 percent in March, down from 0.7 percent in February, the European Union's statistics office Eurostat said. It was the sixth straight month that inflation remained in what ECB President Mario Draghi called a "danger zone" of below 1 percent.

ECB ready to use asset purchases if needed: Coeure

WASHINGTON (Reuters) - The European Central Bank is ready to make asset purchases if it deems them necessary to counter a too prolonged period of low inflation in the euro zone, ECB Executive Board member Benoit Coeure said on Sunday. In a speech in Washington, Coeure added that the ECB would have to decide whether such asset purchases, or a form of quantitative easing, would be useful and comply with its mandate. Quantitative easing occurs when central banks print money to buy assets.

ECB's Draghi: the strong euro could require policy action

European Central Bank chief Mario Draghi said Saturday that the bank may need to take action to stem the rising euro. "The strengthening of the exchange rate would require monetary stimulus" as long as interest rates are already extremely low, he said. Draghi also said that the ECB "should not be complacent" about extremely low inflation, which many fear could stall Europe's economic rebound.

ECB would need to go beyond ABS market for potential QE: Draghi

By Jan Strupczewski and Krista Hughes WASHINGTON (Reuters) - The European Central Bank could not rely solely on purchases of asset-backed securities (ABS) if it resorts to unconventional steps to boost inflation, given the limited supply of the securities, ECB President Mario Draghi said on Saturday. If the ECB starts injecting money into the economy using asset purchases, it is expected to choose a mix of government and private assets, including ABS, which collapsed during the financial crisis and are still recovering.

ECB's Weidmann: no sign deflation spiral will grip euro zone

WASHINGTON (Reuters) - European Central Bank policymaker Jens Weidmann said on Friday he saw no risk of a growth-destroying deflationary spiral taking hold in the euro zone, adding that the bloc's economy would pick up and therefore cause the inflation rate to gradually rise. Euro zone inflation is running at 0.5 percent - well below the central bank's target of close to but just below 2 percent. The ECB's latest staff forecast said inflation in the bloc would rise to 1.7 percent in the last quarter of 2016.

Draghi takes slow road to QE with packaged-debt push

By Eva Taylor and Paul Carrel FRANKFURT (Reuters) - The European Central Bank is mulling creative measures to stave off deflation but one of them, revamping a market that was at the heart of the financial crisis, will take time with no guarantee it will take off. It is scrambling to boost Europe's market for securitized assets - those backed by loans.

Around one-in-three chance ECB to buy bonds outright: Reuters poll

By Jonathan Cable LONDON (Reuters) - There is slightly less than a one-in-three chance the European Central Bank will start buying bonds outright as it struggles to lift dangerously low inflation and support a lackluster economic recovery, a Reuters poll found. The poll of 59 economists, taken this week, gave a median 30 percent chance the ECB would start a quantitative easing program, about half a decade after the U.S. Federal Reserve and the Bank of England launched the same kind of stimulus.
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