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“Comments from ECB officials over the last few days seem to suggest that the balance of risks to our base case for monetary easing are tilted towards earlier rather than later moves,” note ABN AMRO’s Head of Financial Markets Research Nick Kounis.

“Our base case for ECB easing and the timing of the moves is as follows. At the July meeting we think the Governing Council will decide to change its forward guidance on policy rates to explicitly hint at the possibility of rate cuts. In particular, it could say it expects the key ECB interest rates ‘to remain at their present levels or lower “¦’.”

“In September, we expect a 10bp cut in policy rates as well as a clear signal that the ECB is investigating the design of a new asset purchase programme. By December, we expect the ECB to announce a EUR 630bn QE package, to be implemented for 9-months from January 2020 at a pace of EUR 70bn per month. The second 10bp rate reduction will follow in Q1 of next year. However, the recent comments from officials suggest that the balance of risks are towards earlier moves.”