ECB Preview: no fireworks expected this Thursday - Barclays
|In the view of the Barclays Research Team, the European Central Bank (ECB) is expected to make no changes to its monetary policy meeting when it meets this Thursday.
Key Quotes:
“We do not expect a change in the ECB's monetary policy stance following its meeting next Thursday.
However, we think that it will need to recognize that the activity data releases have weakened, the geopolitical risks remain elevated, and the March inflation data did not deliver positive surprises. For these reasons, we think the statement will probably sound slightly more cautious and the balance of risk a bit less upbeat than in March.
All of these factors, in our view, will continue to support the view of a majority of governing council members of a very gradual approach to removing the unconventional monetary policy measures.
We continue to expect a short tapering of net asset purchases that will end the programme in December. The ECB would pause for roughly six months and in June 2019 would deliver a DFR hike of +15bp. Then, in Q4 19, we forecast a DFR and MRO hike of +25bp each, effectively removing negative rates by end of 2019.”
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