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Danske Bank analysts note that incoming ECB President Christine Lagarde has signalled policy continuity.

Key Quotes

“Mirroring the official ECB communication, Lagarde said the institution has the tools to tackle a downturn and has not yet hit the lower bound on interest rates. Quite a different message came from ECB Governing Council member Klaas Knot who argued against a package of easing measures including a restart of QE. The comments are not that surprising given he is the most hawkish ECB member. With two weeks to go before the ECB meets, the market remains priced for significant easing from the ECB.”