ECB: What to expect from the December meet? - Natixis

Research Team at Natixis suggests that today’s ECB meeting is for sure one of the main events of the week and ahead of the meeting, Natixis offer their views on the possible announcements that will draft the short term path of the Eurozone monetary policy. 

Key Quotes

“Globally, we forecast:

1. The ECB to extend the QE programme by 6 months until September 2017 and to maintain the pace of monthly purchases of €80 bn.  
2. (ii) We think it is also very likely that the ECB will make changes to the parameters of the QE programme. 
3. The ECB would react to adverse market reactions in the aftermath to the referendum in Italy by temporarily buying more Italian bonds within the QE framework (but we do not expect that specific measures on this last point will be announced) 
4. In our view, inflation forecasts will be revised upward, with headline inflation now expected to average 1.3% in 2017 (vs. 1.2% in Sep.), 1.7%  in 2018 (vs. 1.6% in Sep.) and 1.8% in 2019. 
5. Growth forecasts are unlikely to change much.”