Risk for EUR is positive for next week's ECB meeting - BAML

Bank of America Merrill Lynch on the euro

Bank of America Merrill Lynch Global Research discusses its expectations around next week's ECB September policy meeting.

"The ECB meeting next week is important, in our view. We expect 20bps depo rate cut and a small QE. We see risks for disappointment if the ECB delays QE, given strong market expectations.

Various ECB speakers in the last two weeks have expressed strong skepticism about the need to re-start QE. In any case, without relaxing its constraints we do not expect a limited QE to affect the low inflation expectations," BofAML notes.

"Risk for the EUR are positive for the meeting, but we would expect overall EUR weakness to remain as long as the data is weak," BofAML adds.

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