ECB preview: Dovish hold - BBH
|According to analysts from Brown Brother Harriman, on Thursday the European Central Bank (ECB) will keep monetary policy unchanged. They see in December an extension of the purchase program.
Key Quotes:
“If the ECB did not seize upon the window of opportunity last month to provide more support, it most likely would not do so now. The most likely scenario is that while Draghi may lay some groundwork, any fresh action will likely wait until December when the staff forecasts are updated.”
“Tomorrow, Draghi can lay the groundwork by saying three things. First, he will likely anchor discussions of the trajectory of policy to inflation and the legal need to work toward its mandate. Second, Draghi will likely emphasize the ECB's flexibility and the numerous tools it within that mandate. Thirds, he will likely stress that there are no technical constraints that cannot be overcome.”
“In December, we expect the ECB to extend asset purchases for another six months and suspect that it may begin slowing its purchases (tapering) in H2 17. There seems to be little appetite to take the deposit rate into the deeper negative territory.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.