Analysts at Nomura explain that at September’s meeting the ECB reiterated its forward guidance on interest rates (on hold through next summer at least) and asset purchases (no wind-down for an extended period after purchases cease) and suggests that they do not think there is any urgent need to change this guidance.
Key Quotes
“We expect for the next few months the ECB will at least retain its “extended period” wording in relation to the stock of asset purchases, and “through the summer of 2019″ for rates on hold.”
“Of course, there may need to be some trivial adjustment to the wording as “extended period” relates to the period after net asset purchases – which are due to cease at the end of this year.”
“On rates, we continue to expect the ECB will raise rates slowly from September 2019, similar to market expectations. In the press conference we expect questioning along the lines of European (i.e. Italian/Spanish) fiscal policy and the ECB’s confidence about rising core inflation in light of recent disappointments.”
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