ECB member Fabio Panetta made headlines yesterday with some dovish remarks. He is one if not the most vocal Governing Council doves, so no surprise there, although it’s significant how he explicitly laid out the role that the ECB should have in supporting eurozone growth, ING’s FX analyst Francesco Pesole notes.

Renewed downside risks for the EUR/USD

“We have a more dovish view on the ECB compared to market pricing exactly because we believe this shift in focus from inflation to growth will lead to faster easing in light of a stagnant activity picture.”

“Today, the ECB releases 3Q data for negotiated wages. This used to be a key input for policy decisions but has lost significance given the greater confidence in the disinflation path. A re-acceleration in wages from the 3.5% of 2Q can offer a counterargument for the hawks, but we suspect some pretty substantial surprise would be needed to heavily affect ECB pricing and the euro.”