ECB: unlikely to be a change in forward guidance - BBH

Analysts at BBH suggest that the focus is on the ECB today and there are no staff forecast updates.  

Key Quotes

“There is unlikely to be a change in forward guidance.  There are four issues that investors are most interested in:  inflation, growth, QE, and the euro.  The first is expected to gradually rise.  The risks to the second are broadly balanced.  QE will continue through September and could be extended, until inflation is on a sustainable and durable path toward the target.  This means that despite hawks’ push, there will be no pre-committing to ending purchases in September.  It will stay data dependent, not date dependent.”

“What can Draghi say about the euro?  He can warn that the volatility of the euro injects uncertainty into the policy outlook.  Also, that a rise in the euro beyond what is justified by fundamentals can make it more difficult to achieve it target.  A rising euro imparts deflationary pressures, curbs growth, and hurts corporate earnings.”