ECB: Some action likely to be forthcoming before year-end – RBC CM

Research Team at RBC Capital Markets, continues to think that some action from the ECB is likely to be forthcoming before year-end and that the main issue around the review of its QE programme announced at its last meeting is less one of content and more one of timing.

Key Quotes

“The minutes of the August meeting did not contain any language consistent with winding down or tapering bond purchases and, if anything, continued to stress the importance of providing reassurance that the ECB would be able to deliver on its commitment that QE could run beyond March 2017.

Our long-held view remains that changes of the QE programme are necessary to ensure that and are most likely to take the form of either dropping the deposit rate floor or easing of the ‘capital key’ rules in order to support peripheral spreads and enhance the pool of eligible assets.”