Investing.com - The European Central Bank (ECB) is not expected to announce any new policy measures on Thursday, but market participants will keep a close eye on its president Mario Draghi for any hints at what the experts say are likely future measures.
After the ECB pulled out all the stops at its March meeting, by announcing cuts to all its rates and an expansion of its asset purchase program, the experts were unanimous that Draghi’s team would take no further action at Thursday’s meeting in their announcement scheduled for 12:45GMT, or 8:45AM GMT.
However, Barclays (LON:BARC) analysts explained that details on the yet-to-be-implemented corporate bonds or the new TLTRO (targeted long-term refinancing operations) program were most likely the first topic on Draghi’s list. In this context, they said that the ECB would likely detail the requirements for the assets eligible for purchase along with the start-date for TLTRO II.
In this regard, all eyes will be on the press conference with Draghi at 13:30GMT, or 9:30AM ET.
Some analysts do not expect the ECB president to deliver any surprises.
Saxo Bank said the meeting would be a “sleepy affair” with details announced on the corporate sector purchase program “but otherwise the stage is set for Draghi to reiterate that the ECB stands ready to combat low inflation while expressing confidence in the measures announced last month”.
However, other experts expect Draghi to begin preparing the red carpet for future measures.
“We believe Draghi will re-open the door for additional rate cuts after stating at the latest meeting in March that he did not anticipate more rate cuts,” experts from Danske Bank said.
“Draghi is likely to do this by emphasizing the ECB’s forward guidance, stating that policy rates are expected to ‘remain at present or lower levels for an extended period of time,’” they explained.
Citigroup’s head of global FX Strategy Steven Englander told Bloomberg TV that he expected a further package to arrive in the third quarter and said that ECB would start switching its language “in the coming months” towards a bias of “if things continue to be disappointing, there’s more that’s going to come”.
Indeed, the consensus of economists pointed towards the September 8 meeting as the most likely time for the next round of measures to be announced, according to a recent Bloomberg survey.
As far as the possible measures themselves, the large majority pointed to an extension to the quantitative easing program beyond the March 2017 end-date, while approximately 36% believed that the ECB could cut the deposit rate further into negative territory.
In any case, although a little over 5% of respondents thought the June 2 meeting was a possibility for a fresh package, none of the 47 economists surveyed expected any action to be made at Thursday’s meeting.