"The information that has become available since early September confirmed a continued moderate but steady recovery of the euro area economy and a gradual rise in inflation, in line with previous expectations. The euro area economy has continued to show resilience to the adverse effects of global economic and political uncertainty, aided by the ECB's comprehensive monetary policy measures, which ensure very favourable financing conditions for firms and households. Overall, however, the baseline scenario remains subject to downside risks.

Available global indicators point to a modest rebound in global activity and trade growth in the third quarter. At the same time, global headline inflation has remained at low levels as past energy price declines have weighed on price increases. Risks to the outlook for global activity remain on the downside and relate in particular to political uncertainty and financial imbalances.

Since early September, sovereign yields have risen and the EONIA forward curve has edged upwards, with yields on intermediate maturities in particular reaching levels close to those reached after the UK referendum on EU membership in late June. Corporate bond spreads rose marginally and overall remained significantly lower than in early March 2016, when the corporate sector purchase programme was announced. Equity prices have declined marginally, with valuations in the banking sector remaining particularly depressed relative to early 2016".