ECB set to go lower for longer - SocGen

Today the ECB meeting will be closely watched and analysts at Societe Generale are looking for a nine-month extension of the APP programme starting in January at a monthly pace of €25bn.

Key Quotes

“We expect the ECB to keep the door open to more QE thereafter if needed: the APP programme would continue to be open-ended and data-dependent. Yet, our baseline scenario is that the QE programme will end in September 2018, paving the way to a first rate hike in spring 2019 to put an end to the negative deposit rate.”

“FX: Downside risk for the euro absent a hawkish surprise

If our forecast is correct, the ECB tapering announcement today should not affect the euro significantly given that the market consensus is along rather similar lines. So it’s likely to be a “buy the rumour and sell the fact” situation.”