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“We look for a relatively unchanged message from the ECB on Thursday: the policy statement is likely to remained unchanged, we don’t anticipate TLTROs, and risks around growth are likely to remain tilted to the downside,” argue TD Securities analysts previewing next week’s ECB meeting.

Key quotes

“The ECB releases the quarterly update of its macroeconomic projections. We expect a sharp downward revision to the growth forecast, with 2019 growth revised down from 1.7% to 1.3%, which would be the biggest single-meeting downgrade to growth since 2012. Much of this, however, is marking to market on the back of weak 2018Q4 growth data, as well as an assumption of weak 19Q1 growth data and assumes little change to the rest of 2019 quarterly dynamics.”

 “From a strictly theoretical standpoint, the ECB should downgrade the new projections enough to re-center them and ensure the risks are balanced. But we don’t expect the balance of risks to be “upgraded” in this sense (even on a large growth downgrade), largely because the risks mainly represent external, binary factors that are hard to model.”

“We expect the Governing Council to maintain its forward guidance of rates on hold until “at least through the summer of 2019″ and long enough to ensure inflation converges on target. Formal changes to forward guidance are unlikely at this meeting, in our view, as the Governing Council wants to see the anticipated rebound in activity first.”