I posted an earlier preview of the European Central Bank meeting from Bank of America / Merrill Lynch here

  • The announcement and Dragi's press conference are today, Europe time (GMT 1145 and 1230 respectively)

More from the bank now:

ECB preview ... offsetting less QE with stronger forward guidance on rates.

One more round of QE

  • We recently recalibrated our ECB call and now expect a nine-month QE extension (until September 2018) at a run rate of EUR30bn a month to be announced this week. Net purchases between now and December 2017 will continue at EUR60bn a month, as planned. As we recently argued, this reflects communication by governing board members (notably Peter Praet) that the effect of duration may dominate the pace of buying when uncertainty is not that high. This would still leave some room for further purchases and would allow the ECB to maintain its easing QE bias, now more symbolic than practical.
  • Talk of even slower buying has picked up in client discussions. But in our view, EUR30bn a month may keep markets guessing the end-date of QE (we expect December 2018 in line with Lautenschlaeger's recent communication that it should end next year), while EUR20bn a month could incentivize markets to interpret the provisional end-date of QE as the final one, with potential knock-on effects for rate hike pricing.


ps. More previews: