ECB is most likely to stand pat - BBH

In view of the analysts at BBH, the ECB is most likely to stand pat and Draghi is likely to reiterate the consensus judgment that while the growth prospects have improved (based mostly on survey data), prices have yet to find sustainable and independent (of the unorthodox monetary policy) path higher.  

Key Quotes

“At the end of last week, Draghi said rates would remain at present or lower levels.  There are no reasons not to expect him to repeat this forward guidance.  If he does not, it would be seen as a bullish sign for the euro.  He also characterized the risks to be improving but still on the downside.  There is not a compelling reason to change this assessment.  New staff forecasts are available in June, and this seems to be the window that "sources" seemed to note who earlier this week suggested a change in guidance was possible then.”

“On a technical point, the Bundesbank purchases of short-term paper under the Eurosystem's program may have exacerbated a shortage, which in turn stresses the repo market.  Since the ECB's program began, it indicated it would lend some of the securities back to the banks.  However, the conditions and costs are still not as user-friendly as they might be, and it is possible that the ECB adjusts the program again.”