ABN AMRO FX Strategy Research comments on today's ECB meeting in which the ventral bank changed its forward guidance, dropping the easing bias in terms of interest rates, in what is the first step in the path towards the exit from its unconventional policy.
ABN AMRO's base case for the ECB going forward:
"1) A tapering of asset purchases from January 2018 onwards, with the monthly pace slowing by EUR 10bn each month.
(2) Tapering based on limits to extending programme through 2018 given issue(r) limits rather than the inflation outlook.
(3) We think inflationary pressures will remain weak for some time to come, but the ECB could sell tapering on the stronger economic recovery story.
(4) We expect the ECB to signal a tapering of asset purchases at the September 2017 meeting, when it will make further changes to its forward guidance," ABN AMRO argues.
Source: ABN AMRO ResearchOriginal Article
