Citing two sources familiar with the matter, Reuters today reported that the European Central Bank (ECB) was expected to its growth projections for both 2019 and 2020 tomorrow.
“Growth will be not far above 1 percent both this year and next, the figures are expected to show, underpinning the ECB’s plans to approve more stimulus, the sources, who asked not to be named, told Reuters,” wrote Reuters’ Balazs Koranyi.
The ECB is expected to announce a comprehensive stimulus package that includes a rate cut to the policy rate and possibly a re-introduction of a 12-month quantitative easing (QE) programme.
Previewing the ECB meeting, TD Securities analysts said that they are expecting the ECB to announce a 20bps rate cut with tiering alongside a â‚¬40 billion monthly QE. Commenting on the possible market reaction, “Our dovish ECB call has us looking for downside risks to EURUSD. We think spot will be more sensitive to a large QE announcement than rate cuts as much of the expected Fed/ECB policy path differential already looks priced,” analysts said.
Meanwhile, the EUR/USD pair is trading at 1.1000, losing 0.4% on a daily basis.