ECB: Will this week’s meeting deliver the expected changes? – RBC CM

Research Team at RBC Capital Markets, suggests that this Thursday will bring the ECB meeting – and markets are anxious what it might hold in store.

Key Quotes 

“The ECB has argued that the QE programme will remain in place until inflation (expectations) have reached levels closer to the central bank’s target – which is clearly not the case at present. The market (including ourselves) has, in turn, been arguing for a while now that the ECB will have to make changes in order to be able to keep up the QE programme. The questions are: when will those changes take place and which precise form will they take?

For Thursday, we expect no change in interest rates, a relaxation of the deposit rate floor and hints of more changes (including the capital key) to come.”