The European Central Bank meet Thursday 14 June 2018
- Announcement due 1145GMT
- Draghi presser begins 1230GMT
Earlier previews are here:
These now, via:
Barclays:
- We expect the staff macro projections to show a slight downward revision of near-term growth and an upward revision to headline inflation, owing to higher oil prices and weaker EUR.
- We believe the GC will discuss the options for tapering the net asset purchase programme towards zero. However we do not expect policy changes in June, with the ECB likely only discussing policy options, and keen to see more data. In turn, we expect the tapering of QE to be announced in July (even if an announcement in June would not be a complete surprise to us).
Daiwa:
- We already know, from Chief Economist Peter Praet's speech on Wednesday, that the policymakers will discuss issues related to the future of the QE programme. And we suspect that the rest of the Governing Council will agree with Praet's assessment that a sustained adjustment in the path of inflation towards target is within reach "to warrant a gradual unwinding of [the ECB's] net purchases".
- But the ECB will not be complacent about recent soft economic data, which suggest that downside risks to the economic outlook have increased, while bond markets - in particular BTPs - remain volatile. So, we also expect a final agreement and announcement of its plans of how it intends to bring those purchases to an end to be postponed to the July meeting. Our baseline scenario, of a gradual tapering of net asset purchases over the course of Q4 to zero by end-December - perhaps amounting to a total of about EUR30bn over the quarter - remains in place.
- The ECB's updated economic forecasts, also to be unveiled on Thursday, will in due course be used to justify the winding up of the net asset purchase programme. Admittedly, the weakening of the dataflow justifies a downwards revision to its GDP forecast for this year. But perhaps that will merely be nudged lower by just 0.1ppt to 2.3%Y/Y, thus reversing the upwards revision made in March. And we think the ECB might still wish to leave its growth forecasts for 2019 and 2020 unchanged at 1.9%Y/Y and 1.7%Y/Y. Moreover, we suspect that the headline inflation forecast for this year and next might be shifted slightly higher, by 0.1ppt to 1.5%Y/Y in both years. That, however, will partly reflect the impact of the higher oil price, for which the assumed average price this year will be pushed up by more than $5 per barrel to more than $70. However, the ECB might also be tempted to push the forecast for core inflation this year higher too, while leaving the profile for future years unchanged, so that in 2020 it reaches 1.8%Y/Y - close to but below 2%Y/Y, arguably in line with the ECB's target.
BNP Paribas:
- Peter Praet's speech ... hinted that conditions to end QE have been met, opening the way to an announcement to that effect …
- Whether the fine details will be delivered already on 14 June or kept until July is still open, but we now think the former looks somewhat more likely than the latter.
- June or July, the bottom line does not change: net asset purchases are set to end soon. Our central case remains for it to happen in December this year after a short taper during Q4.
- The ECB is likely to keep to language that is cautious and dovish overall, emphasising the role of reinvestment and using forward guidance to keep rate hike expectations in check.
- We continue to expect the ECB to deliver the first hike in mid-2019 and to take the deposit rate to zero by the end of next year.
(bolding mine)
