ECB's Rehn: Central scenario is that Eurozone is seeing a soft patch but not a recession

Further comments by ECB governing council member, Olli Rehn

• If we face a new recession, we are ready to adjust and use all instruments
• Can judge after new economic forecasts next month on how to adjust policies
• ECB is analysing if Eurozone soft patch is temporary or not

The comment in bold, in my view, is the key issue that the ECB has to answer in the coming months or possibly as early as next week. As they are set to roll out fresh TLTROs, they need to be sure on how confident they are that the current 'soft patch' won't carry over to 2H 2019 or even to 2020.

I reckon they'll still keep the tag line as what Rehn's headline comment is saying but their conviction is probably growing weaker by every meeting. Hence, if we are to expect anything else moving forward, it would be a good assumption right now to believe that the ECB will err towards caution and "play it safe" by being more conservative/dovish.