Boa / ML on their expectations for the European Central Bank

ECB - less for longer and low for long

  • Factoring in recent communication from the ECB, our new baseline is the commitment on 26 October of EUR30bn for 9 months.
  • We still expect QE to end in Dec-18, although the option of buying into early 2019 will exist.
  • Also, we expect stronger fwd guidance. The main issue remains that no further ammo is left in case of adverse developments.

I posted earlier on HSBC's thoughts: HSBC say ECB to slow purchases to EUR40bn/month for an additional 6months