With the ECB’s asset purchases due to end this month and forward guidance set to remain unchanged, a focus at next week’s policy meeting will be staff forecasts for growth and inflation. At its Governing Council meeting next week, we expect the European Central Bank (ECB) to confirm that its asset purchases will cease at year’s end. However, it is likely to stress that the end of the net asset purchase programme does...
Read More »ECB preview: an end to net asset purchases
With the ECB’s asset purchases due to end this month and forward guidance set to remain unchanged, a focus at next week’s policy meeting will be staff forecasts for growth and inflation.At its Governing Council meeting next week, we expect the European Central Bank (ECB) to confirm that its asset purchases will cease at year’s end. However, it is likely to stress that the end of the net asset purchase programme does not represent a tightening of its policy stance. We also think the ECB will...
Read More »ECB gets ready to make the leap
The ECB has had essentially two options going into the June meeting: either a dovish decision but a hawkish communication (hinting at an imminent QE tapering), or a hawkish decision but a dovish communication (counterb alancing a tapering announcement with dovish sweeteners). Ever since economic indicators have started to deteriorate this year and risks to global trade have accumulated, ECB rhetoric has been...
Read More »ECB gets ready to make the leap
An announcement on quantitative easing is looking likely as early as next week. But the jury is out on what the central bank will actually say.Peter Praet’s hawkish comments on inflation this week did not surprise us in terms of substance but did in terms of timing. The view of the (usually dovish) ECB chief economist carries significant weight, and therefore an announcement on QE is now likely at the 14 June meeting.We expect the staff projections to be revised lower in terms of GDP growth,...
Read More »ECB meeting preview: guide me if you can!
We see little incentive for the ECB to precipitate things at the beginning of the year, especially as core inflation continues to disappoint, but there could be hints at “gradual changes” in forward guidance.We expect no policy decision and no major change in the ECB’s communication at its 25 January meeting. There is no incentive for the ECB to fuel further hawkish market re-pricing at this stage, especially after core inflation disappointed again and the EUR has strengthened once more. The...
Read More »ECB preview: less reason to be dovish, but inflation battle not yet over
Next week, we expect the ECB to highlight that downside risks to the euro area outlook have diminished further, warranting upward revisions to staff forecasts and a more neutral monetary stance.The latest economic developments are consistent with the ECB turning somewhat more hawkish – or, more accurately, less dovish. Business surveys have improved, pointing to annualised GDP growth of around 2% in Q1. Headline inflation returned to the ECB’s 2% target in February, for the first time in...
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