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Analysts at Rabobank notes that the ECB tried to convey confidence after its March meeting, but at the same time slashed its forecasts.

Key Quotes

“Its policy actions, too, paint a different picture. Despite its self-proclaimed confidence, the ECB acted more resolute than the market had anticipated – suggesting that there was at least some sense of urgency within the Council.”

“The ECB announced TLTRO-III, but the modalities contradict the reasons cited for these operations somewhat.”

“Despite the substantial flattening that has already taken place since the last ECB meeting, we see substantial risk of further flattening ahead; particularly from the mid-2020 points outward. This view is based on our expectations that the ECB will not get the chance to hike rates next year, on the back of growing concerns about a US recession, culminating in the FOMC cutting rates from June 2020 onwards.”