ECB will have to deliver at least two more 10bps rate cuts - TD Securities

Commenting on the European Central Bank's (ECB) policy announcements today, TD Securities analysts said that a 10 basis points rate cut and €20 billion per month quantitative easing (QE) was hawkish on the surface but noted that the ECB's monetary policy was now linked explicitly to the inflation goals.

Key quotes

"We don't think that the ECB has delivered enough. We think it will have to deliver at least two more 10bps rate cuts in December and March, as well as to augment the pace of QE to €40bn/month in March once the global macro environment worsens further."

"The ECB's September policy decision saw a notable degree of intraday volatility. Despite that, however, key technical thresholds held - in both directions."

"This lack of a strong directional cue suggests investors will pivot quickly to next week's FOMC meeting for guidance. The ECB's policy measures may be "adequate", but we think that leaves the market in need of fresh catalysts to provide more of push to escape recent ranges."