Nick Kounis and Aline Schuiling, analysts at ABN AMRO, point out that concerns about low inflation and low inflation expectations are already building, even under the ECB’s more optimistic scenario.
Key quotes
“Compared to our own projections for growth and inflation, the ECB is optimistic.”
“An announcement of APP-II is likely by the end of the year, with actual purchases starting in January 2020 (though it could be launched early). We assume 9 months at EUR 70bn a month and a total size of EUR 630bn.”
“Following today’s ECB communication, we see a rising chance that there could be a rate cut in addition to the second round of QE already factored into our base case.”
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