The ECB is not expected to change much at its September meeting as the recent data have not surprised to an extent that would make the ECB change its mind or make drastic changes to its macroeconomic projections, suggests the analysis team at Nordea Markets.
Key Quotes
“While core inflation has surprised slightly to the downside since June, technical assumptions, such as for oil prices, support a slightly higher headline inflation projection.”
“Thus, the net asset purchases will end in December 2018 in line with the current monetary policy signals. We also still consider the ECB’s wording in the forward guidance about interest rates valid, meaning that policy rates will remain at their current levels at least for the next 12 months. This implies that market reactions to next week’s meeting will be small.”
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