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30 Oct 2015
EUR: Likelihood of December ECB action rising - SocGen
FXStreet (Delhi) - Michel Martinez, Research Analyst at Societe Generale, expects that the ECB now looks increasingly set to act in December.
Key Quotes
“Last week after the ECB meeting, we saw a December move as less likely – but still very possible – than a March 2016 move. A series of developments (dovish tone from ECB board members, weakness in credit dynamics, Fed action delayed) has changed our minds.”
“We expect: 1) a 10bp deposit rate cut, which happened the last two times; 2) an increase in the size of asset purchases from €60bn to €70-80bn (adding also corporate bonds); 3) an extension of the QE and TLTRO programmes beyond September 2016. We expect the ECB to indicate that the QE programme will run until inflation rates near 2%.”
Key Quotes
“Last week after the ECB meeting, we saw a December move as less likely – but still very possible – than a March 2016 move. A series of developments (dovish tone from ECB board members, weakness in credit dynamics, Fed action delayed) has changed our minds.”
“We expect: 1) a 10bp deposit rate cut, which happened the last two times; 2) an increase in the size of asset purchases from €60bn to €70-80bn (adding also corporate bonds); 3) an extension of the QE and TLTRO programmes beyond September 2016. We expect the ECB to indicate that the QE programme will run until inflation rates near 2%.”