ECB minutes very unlikely to signal tapering soon - BNPP

Research Team at BNP Paribas, suggests that the account of the ECB’s September meeting will be released today and a speech by ECB board member Praet in New York will be watched closely.

Key Quotes

“We would expect to find little or no support for the idea that the ECB could be ready to discuss exit from its current asset purchase program any time soon. Indeed, we expect an announcement at the December meeting of a six month extension of the program beyond its current March 2017 expiry. While markets would likely not view such an extension as new easing, the ongoing anchoring of front-end yields should leave the EUR vulnerable once markets begin to price Fed tightening more fully and expectations build for exit from accommodation in other G10 economies.

We target 1.08 in EURUSD by the end of this year and we remain short EURSEK in our recommendations portfolio.”