Economists at Deutsche Bank expect that today we’ll get a confirmation that QE net purchases will be phased out in the final quarter of this year in the forthcoming ECB meet.
Key Quotes
“As a reminder, the ECB included a caveat which gave it optionality of sorts depending on incoming data, but given that the inflation outlook hasn’t weakened since June then there’s little reason to think that there’s been a “major deviation” that could cause the ECB to change its tune.”
“Meanwhile, relative to the most recent consensus expectations, our colleagues note that the June staff forecasts look in line to marginally too optimistic so there’s a moderate risk that the staff revise forecasts slightly lower (around a tenth lower for CPI and GDP). On this it’s worth noting the Bloomberg article doing the rounds yesterday which suggested we would see lower GDP forecasts from the ECB today.”
“Also worth watching out for is President Draghi’s response to Italy. It’s hard to see him approaching any questions from reporters with anything but a straight bat but the market will no doubt be closely watching.”
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