Here’s what analysts are saying about today’s big ECB meeting

It’s a big day for the European Central Bank, with both an interest rate announcement and an update on the bank’s monetary policy.

While no change is expected on interest rates, ECB head Mario Draghi’s press conference at 1.30 p.m BST will be closely followed for any hints about what the bank is planning next.

Draghi’s big problem is the Chinese market meltdown of recent months, which has put more deflationary pressure on the eurozone after speculators piled into the “safe haven” euro in the wake of the crisis.

This in turn has put pressure on European exports by making them more expensive and there are fears that this slowdown in trade could lead to lower prices in Europe.

We’ve rounded up what analysts, economists, and commentators are expecting to hear from Draghi this afternoon.

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content=”Analyst: Paul Donovan

‘The ECB meets, and of course is expected to do nothing with regards to policy (the ECB excels at doing nothing). However there is some slight excitement over the prospect of the quarterly forecast update which may help shape policy expectations about next year.'”
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content=”Analyst: Jim Reid

‘With regards to the ECB, Draghi’s press conference will be closely watched. DB’s Mark Wall expects the council to, as a minimum, highlight downside risk, reiterating its commitment to QE and signalling its ‘readiness’ to act. However Mark thinks that this may not be enough and instead the rhetoric may go further than in the last meeting.

‘In particular, the Governing Council and Draghi could explicitly mention that there is an increased likelihood that the ECB will have to do more to achieve a sustainable inflation path towards 2%. This could eventually include extending the duration or increasing the monthly target of asset purchases. Also worth watching will be the staff inflation forecasts where Mark expects the 2017 forecast to be revised marginally lower. This fits in with our view that central banks will likely be forced to do more for some time to come.'”
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content=”Analyst: Mic Mills

‘The press conference at 13:30 will be the main focus as we wait to hear how China’s slowdown and the low oil prices have affected the Eurozone economy, we may even hear a mention of Greece although that issue seems to be the forgotten elephant in the room.'”
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content=”Analyst: Nour Al-Hammoury

‘Today, the ECB is expected to keep its current policy unchanged, but Mario Draghi is facing another headache after the recent strength in the Euro, therefore he may adopt a more dovish tone regarding extending the current QE program.'”
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content=”Analyst: Philip Shaw

‘Market attention is also set to focus on the ECB’s September meeting; no change is expected with the refi rate likely to stand on hold at 0.05% and QE continuing at a pace of €60bn/month. Most interest will, as ever, be focused on Mario Draghi’s press conference, where questioning is certainly set to focus on the recent market turmoil.

‘But attention will also be on the outlook for ECB policy in light of a return in disinflationary pressures following the continued fall in commodity prices and a stronger euro. Recent comments from the Vice President, Vítor Constncio, and Chief Economist, Peter Praet suggested the Governing Council would be willing to consider additional supportive action should it be warranted.'”
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content=”Analyst: Connor Campbell

‘Once the services PMIs are done and dusted focus will turn to today’s ECB conference, which could bring the with it some slashed inflation forecasts and may lead to questions over how far the Draghi and co. are willing to extend QE to ensure their (increasingly distant) targets are met.

‘And whilst Draghi won’t be bombarded with as many questions on Greece as has been the norm for the past few months, there will likely be a few queries over whether a) the ECB is worried about the impending (and increasingly tight) election destabilising the recent deal, and b) when capital controls in Greece will finally be lifted.'”
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content=”Analyst: Michael Hewson

‘Later in the day with Greece temporarily on the back burner the ECB meets to discuss interest rate policy with speculation rising that the bank might feel compelled to look at extending its current QE program after recent dovish comments from ECB officials in the last week or so, over concerns about continued weakness in commodity prices.

‘Further measures are unlikely given we are only six months into the current program and have another twelve months to go, and there isn’t much central bank policy can do about falling commodity prices, which suggests that ECB President Mario Draghi will try and talk the euro lower simply because he can’t do much else. With that in mind expect to see downgrades to the bank’s inflation forecasts, and a promise to do more if needed. ‘”
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