There’s A Reason Nobody Is Buzzing About Today’s ECB Meeting

Mario Draghi

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Later today, the ECB will make its latest rate decision.The meetings hasn’t generated much buzz.

The reason? Probably because of this: Nobody expects much to happen.

Here’s the basic expectations, from BTIG’s Dan Greenhaus:

With regards to tomorrow’s ECB Governing Council meeting, they are all but assured to leave its main refinancing rate unchanged at 1.0% while no announcement with regards to non-standard policy is expected. Going forward though, the ECB is likely to ease further in coming months:

While the ECB remains concerned about the effect lower interest rates will have on money markets, we expect two more rate cuts of 25 bps each bringing the refinancing rate to 0.5%.

We continue to believe that the ECB will ultimately have to expand its securities market program (SMP) beyond current levels; the ECB has already purchased €211 billion worth of bonds. In a particularly adverse scenario, we would not be surprised to see this amount reach €450 billion. However, we do not see unsterilized purchases (quantitative easing) occurring in the future.

So… don’t expect much, and you won’t be disappointed.