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Economists at ABN Amro remain of the view that the ECB will announce additional stimulus in the coming months as economic growth and inflation will likely disappoint ECB expectations.

Key quotes

“We now expect a package to be announced in June rather than the upcoming meeting in March. This is because ECB officials have signalled that it is too early to make a judgement about whether the medium-term outlook has changed in the face of the economic shock related to the spread of the coronavirus.” 

“We expect the ECB to cut its deposit rate by 10bp, announce a step-up of net asset purchases to EUR 40bn and increase the maturity of TLTRO loans by another year at the June Governing Council meeting.”

“A full 10bp ECB rate cut is now priced in for the July meeting, while a week ago, only a 60% chance of a cut was priced in by the end of this year. This is only a little later than our updated base case for the ECB.”