ECB: Expect a relatively straightforward meeting - TDS

The ECB’s Governing Council meets today to set policy and analysts at TDS expect a relatively straightforward meeting with no announced policy changes.

Key Quotes

“We do expect a tweak in the language, indicating that QE would now only be adjusted in duration, not size.”

“The Eurozone economy has performed well this year. While core inflation remains depressed, the strength in real activity should boost the Governing Council’s confidence that they can taper QE next year. However, we don’t expect Draghi to acknowledge any detailed tapering discussions at next week’s press conference.”

“We expect the EUR to remain firm but contained within the 1.13/1.16 range ahead of the ECB. We had been looking for more near-term downside risks to EURUSD, but we are less convinced now. We retain our strategic bullish stance on the EUR and would look to buy dips that arise from ECB-driven volatility.”

“We are not fading the current move higher in European rates. Technicals have broken, the shift in ECB messaging is enough to support a higher trading range, and Eurozone data surprises seem to be on the upswing.”