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13 Apr 2015
ECB Meeting: Draghi to reassure that an early QE tapering is unlikely – BAML
FXStreet (Barcelona) - According to BofA-Merrill Lynch, in the next ECB meeting, Draghi will reassure markets that an early QE tapering and further cut in depo rate are unlikely, and also announce changes to the list of SSAs eligible for purchase program.
Key Quotes
“The next ECB meeting should be one of the easiest for the Governing Council in many months. QE has been announced and pre-committed until September 2016; the growth outlook is getting brighter, including an improvement in the credit cycle, while inflation surprised to the upside for the first time in many months.”
“The very strong performance of the QE program in its first month also appears to have dealt with concerns regarding the ECB's ability to deliver on the program size.”
“But the ECB press conference will likely need to address two recurring questions: whether the brighter outlook could lead to early QE tapering and whether the depo rate could be cut further. As we have argued before, we think the answer to both questions is negative and that Mr Draghi will reassure markets once again.”
“We also expect the ECB to announce changes to the list of SSAs eligible for the purchase program.”
Key Quotes
“The next ECB meeting should be one of the easiest for the Governing Council in many months. QE has been announced and pre-committed until September 2016; the growth outlook is getting brighter, including an improvement in the credit cycle, while inflation surprised to the upside for the first time in many months.”
“The very strong performance of the QE program in its first month also appears to have dealt with concerns regarding the ECB's ability to deliver on the program size.”
“But the ECB press conference will likely need to address two recurring questions: whether the brighter outlook could lead to early QE tapering and whether the depo rate could be cut further. As we have argued before, we think the answer to both questions is negative and that Mr Draghi will reassure markets once again.”
“We also expect the ECB to announce changes to the list of SSAs eligible for the purchase program.”