ECB Preview: Heavier on jawboning risks than action – Scotiabank

In its latest preview of the European Central Bank (ECB) meeting, up for release at 11:45 GMT, Scotiabank joins the broad market anticipation of no rate change. The bank also doesn’t expect any major changes to the regional central bank’s economic forecast.

Key quotes

It's likely premature to expect imminent changes to monetary policy. 

The Pandemic Emergency Purchase Programme, for example, has a massive amount of unutilized space given it currently stands at about €500 billion and hence well shy of the €1.35 trillion ceiling. 

Major forecast changes are unlikely. 

The ECB is undertaking its own strategic review-the first since 2003-and is expected to deliver the results sometime later next year. 

Watch for further reference to currency concerns given the nearly 10% appreciation in the euro to the dollar since May with half of that occurring since July

Overall, the meeting is likely to be heavier on jawboning risks than action, with more of the tangible policy risks being saved for subsequent meeting.