ECB: Press release likely to be unchanged - TDS

Analysts at TDS suggest that their base case scenario sees the ECB’s press release unchanged; with about 1/3 of analysts looking for a language change in March, they see scope for some dovish disappointment.

Key Quotes

“That could extend into the press conference, if Draghi emphasizes the lack of progress toward the inflation target as why guidance is not ready to change.”

“FX Strategy: Most scenarios favour moderate downside risks for EURUSD. Those should remain contained, however, and dip buyers should emerge. A particularly hawkish Draghi could send spot to new highs for this cycle above 1.2555.”

“Rates Strategy: Continued patience on monetary policy favours both our ECB June 19 receivers & Eonia curve flattener positions. With ECB anchoring the short end, we expect the 5s30s Bund curve to steepen.”