ECB to remain square for now – Rabobank

By FXStreet FXStreet (Delhi) – Research Team at Rabobank, do not expect the ECB to make any significant changes to its December growth projections.

Key Quotes

“According to rumours, the ECB has seemingly been putting all its creativity to work in trying to come up with just the right measure(s). However, we believe that at this stage the ECB will not implement any out-of-the-box policies yet. Instead, we see the ECB stick to what it knows, cutting the deposit rate by 15bps and increasing monthly asset purchases by EUR 30bn.”

“Against a seemingly improving macro-economic backdrop, it would arguably perhaps even be too early to do anything at all. For this reason, we currently do not see sufficient support in the Governing Council –especially amongst the hawkish, but perhaps also more moderate Council members– for such drastic changes in current ECB policy.”

“Still, after recent remarks have really fuelled the market’s expectations of further action, it should be relatively easy to find a consensus that the ECB will have to give the market at least something.”

“We therefore believe that the ECB will opt for a combination of a deposit rate cut and an expansion of quantitative easing, cutting the deposit rate by 15bps and scaling …read more

Source:: FX Street