“For the ECB, 2019 will be the year – at least attempted – next step of policy normalization,” note ING analysts.
Key quotes
“With the end of the net-QE purchases, all eyes will be on the timing of the first rate hike. However, given doubts about the strength of the Eurozone recovery and underlying inflation not gaining momentum, the ECB will take a very dovish stance, pushing the timing of a first deposit rate hike towards the end of the year. A refi-rate hike may not happen until 2020!”
“The ECB should also try to prevent speculation about a series of rate hikes by using forward guidance on rates, and announcing that reinvestments of maturing assets will continue at least until the end of 2020.”
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