ECB: Cruise control – BNPP

Research Team at BNP Paribas expects the European Central Bank to signal cautious optimism about the economic outlook at its press conference and to emphasise reduced risks of deflation.

Key Quotes

“President Mario Draghi is likely to downplay the monetary-policy implications of recent data, however, for fear of stoking premature talk of an end to quantitative easing.”

“Mr Draghi will probably stick to the line that scaling back asset purchases is not equivalent to tapering – ie, that there is no plan to cut purchases to zero at this stage.”

“The ECB should reach for the controls again later this year, as it starts to eye an exit. In our view, the asset-purchase programme will be at or close to its final destination in mid-2018.”