ECB: What to look out for on Thursday? – Rabobank

Elwin de Groot, Senior Eurozone Strategist at Rabobank, suggests that in the absence of fresh measures, we do expect Mr. Draghi to underscore that the ECB stands ready to add more stimulus if its forthcoming analysis indicates that this is warranted.

Key Quotes

“We expect questions to focus on:

·         What easing options the ECB would consider in September (or later)

·         The impact and first assessment of recent policy measures (TLTRO-II and CSPP in particular)

·         What type of action it would prefer, if necessary, to ensure that it will achieve its quantitative targets in the asset purchase program

·         How the ECB sees ‘other stakeholders’ doing their bit to contribute to the recovery

One particular question is whether the ECB would be prepared to take the deposit rate further into negative territory (we are still calling for a 10bp cut in September), if only because it would re-affirm its dovish stance and is the easier one among its options.”