Nothing but a dovish attitude
* Will the ECB cut rates on Wednesday? In a Reuters poll 75 of 75 analysts say no (including us), so let us not waste much time on this.
* What else can Mario Draghi do? He can do his best to sound dovish and emphasise the weakness in some hard data and credit data and downplay the improvement in soft data. He can also repeat the ‘extended period’ forward guidance and signal that rate cuts are still more likely than rate hikes in the near future. However, in our view, the obvious to many next big step ahead – a shift to rule-based forward guidance – will not be taken. Last month, Draghi clearly said regarding forward guidance, ‘we do not want to change it’.
Read the full report: Economic Research
Danske Bank