ECB to announce an extension to their QE programme – RBC CM

Research Team at RBC Capital Markets, expects the ECB to announce an extension to their QE programme when they convene today.

Key Quotes

“The growth outlook for 2017 is challenging and, energy price developments aside, inflationary pressures remain weak. The exact form of an extension will depend on the outcome of the review of the asset purchase programme commissioned in September. However, we continue to see some watering down of the deposit rate floor (by allowing some purchases below the -40bp deposit rate whilst keeping the overall portfolio yield above that level) and allowing purchases to deviate from the capital key as the main changes necessary to allow purchases to continue beyond their current planned expiry in March.”