Fed and China not necessarily a signal for ECB to do more

ECB president Draghi has gone to great lengths to explain that there is ample room for the ECB to adjust the "size, composition and duration" of its asset purchases. Many have taken this as a signal that more ECB action is forthcoming. 

In contrast to its signalling ahead of QE, which was also about adding QE to the ECB's toolbox, there is nothing inevitable about further ECB easing. While Draghi has a good track record of being ahead of the markets, current euro area trends are not clear-cut, with domestic resilience countering higher external risks. 

"As stated by Draghi, again today in the European Parliament, more data will be needed to determine the scale of the fallout from China. This morning's PMIs showed resilience in September, supporting the GDP growth forecast of 0.4% qoq in Q3", says Societe Generale.