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Nick Kounis, head financial markets research at ABN AMRO, points out that over recent days, a number of the traditionally hawkish members of the Governing Council have expressed their opposition to the ECB embarking on the path of further monetary stimulus.

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“We do not think the hawks on the Governing Council will derail a stimulus package at the September meeting. The hawkish group on the council most likely numbers 5-6 members of the total of 25.”

“A majority of members is clearly in favour of stimulus and this was represented in the statement following the July meeting, which represents the central tendency of the Governing Council. Indeed, the main message in the press statement was that the ECB ‘stands ready to adjust all of its instruments, as appropriate, to ensure that inflation moves towards its aim in a sustained manner”¦ we have tasked the relevant Eurosystem Committees with examining options, including ways to reinforce our forward guidance on policy rates, mitigating measures, such as the design of a tiered system for reserve remuneration, and options for the size and composition of potential new net asset purchases’. We continue to expect a large +package of monetary stimulus measures at the September meeting.”