ECB's Mersch: Likelihood of action at June meeting has grown substantially

• Governing council unanimous in willingness to deploy conventional and unconventional tools to counter risks of very low inflation over a prolonged period of time
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• No signs of deflation but must be prepared for deflation risks
• Too long period of too low inflation risks unmooring inflation expectations
• Securitization markets should be revived; global initiative would be desirable but it would be appropriate for Europe to go it alone.
  EUR/USD dipped toward 1.3700 briefly before returning to the high 1.37-teens.
  Nothing we haven't heard before, but it does increase the odds of a June cut, if that is possible since a move is almost certain at this juncture.
  
  By Jamie Coleman | Mon, May 19 2014, 14:01