ECB council meeting: warm-up for December - Commerzbank

Dr Michael Schubert, analyst at Commerzbank does not expect any new decisions from the ECB governing council until the meeting in early December. According to him, next Thursday, discussions are thus likely only to focus on the direction the council will take. One issue is likely to be the profitability of banks; another will be the latest results of the “Survey of Professional Forecasters” (SPF).

Key Quotes 

“The ECB governing council will unlikely be able to escape making a statement on the subject of tapering, now that a report in the media has triggered an intense debate on the markets. In principle, the central bank should deal with exit scenarios internally, a long time before any exit becomes likely. To avoid misleading signals, ECB president Draghi will merely stress that QE will be continued on the same scale of 80 billion euros per month until price stability (just under 2%) is clearly visible.”

“The governing council is likely to discuss the parameters of QE (e.g. upper limits of purchases,
lower limit of interest) in December as, according to ECB vice president Constancio, the working
groups for this issue will only then present their results to the governing council.”