Thursday, 22 April, 2021
ECB Street Preview
ECB Street Preview
Citi: expect policy to be left unch; ECB is under far less market pressure than in March; any discussion on
purchase pace is likely to be brief, with the ECB only due to review the decision quarterly; the ‘significant
increase’ could last just one quarter if mkt conditions remain stable and vaccine progress continues; see ample
space to keep a higher pace for longer
Commerzbank: expect policy to be left unch; the meeting is likely to be uneventful; clear ECB will review QE
pace every quarter with new macroeconomic projections; a more relaxed background tone is likely this week
Danske: expect policy to be left unch; this is a stock-taking meeting with focus on the resilient economic data
and positive outlook; Lagarde likely to repeat the ‘delayed but not derailed’ recovery narrative
GS: expect policy to be left unch; Lagarde could signal the GC is satisfied with its step-up in PEPP purchases;
near-term risks remain tilted to the downside but could note upside activity risks given the increase in
vaccinations, encouraging data & US fiscal plans; likely to stress inflation outlook remains well below its aim
ING: expect policy to be left unch; with clarity on the reaction function and little fresh economic news/data,
the meeting will likely be unexciting; in June, the Eurozone should have seen some reopenings, there will be
new staff projections and the ECB will reassess the pace of its asset purchases
As much as the ECB might want to avoid rocking the boat today, we think that the risks from this meeting are skewed towards higher rates. It might not take much for markets to see a confirmation of their bullish view around the economic prospects
Investec: expect policy to be left unch & should not yield any surprises given the decisions made in March;
expect GC to reaffirm its commitment to faster PEPP pace this quarter; unless there is a further deterioration
in financing conditions, do not expect extension of enhanced PEPP purchase rate beyond June
MS: expect policy to be left unch; expect a non-event for three reasons; high bar for further change after the
March decisions, little change in the outlook since March & broadly stable financing conditions; Knot’s
comments on reverting to a lower purchase pace in 3Q & ending PEPP by March 2022 highlight a coming
debate; Lagarde’s response to this split could be an interesting feature of the April presser
Nordea: expect policy to be left unch & no new signals; factoring in Easter holidays & redemptions, weekly
PEPP purchases have increased to ~€20bn; euro has strengthened a bit in April (so slightly tighter financial
conditions) but not enough to worry ECB; Covid 3
rd wave is ongoing &should continue to mean dovish message
NWM: expect policy to be left unch; the meeting is likely to be uneventful on policy but could be key in
changing the narrative for rates markets (if the ECB reiterates the hawkish tone from the minutes); see risk for
the mkt from any optimism & signalling that purchase pace will be relaxed in H2
Soc Gen: expect policy to be left unch; data is on the strong side but lockdown extensions likely so no need to
discuss additional action; focus should be on next steps for PEPP as the pandemic fades & progress on the
Strategy Review; expect ECB to stress the importance of implementation of the Recovery Fund & continued
fiscal support
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