Analysts at UOB Group explained that the European Central Bank (ECB) has its monetary policy decision on Thursday (20 July).
"With European political risks receding, and also sustained signs of economic recovery broadening, there have been increasing expectations that the ECB may signal some removal of monetary stimulus."
"But we caution that markets may have run ahead of fundamentals as ECB still urges persistence in accommodative monetary policies and inflation remains subdued.
Our view is that the ECB rate hike is at least a year away and the QE tapering is more of a technical necessity."
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