Tuesday, 24 October, 2017
ECB STREET VIEWS:
* Pictet Asset Management expects 9-month extension of QE at E30bn p/m along with some changes to QE composition and reinvestment policy".
* RBC: Look for a reduction of at least E30bln in net terms with duration remaining opened ended but with at least a 9-month end date. Forward Guidance should be strengthened and re-iterated.
* Soc Gen: 9-month extensions at E25bln p/m, possibly buy debt with longer maturities. Keep door open to more QE thereafter if needed, maintain rate hikes for March and June 2019 to put an end to the negative deposit rate.
* Barclays: Expect 9-month extension at E30bln p/m, but do not rule out 12-month at E20-25bln. Believe forward guidance will be left unchanged for now but amended in Q2 2018 to allow first depo rate hike before end of 2018.
* ING: Expect 12-mth QE extension at E25bln p/m & Draghi to emphasise sequencing
— rates to remain low beyond end of QE, help anchor interest rate expectations.
* TD securities: Look for ECB to announce QE at E30bln p/m for 12-months, coupled with unchanged forward guidance (QE until Dec 2018 or beyond if needed) and remain firm on sequencing (rates will not rise until well past end of QE)
* UBS: ECB to cut QE to E30bln p/m for 9-months, leave option open to extend or increase QE if needed depending on data and reiterate rates ‘likely to stay at current levels for an extended period of time, and ‘well past’ end of QE.
* Goldman: Maintain our dovish view, expect ECB to announce 12-month tapering worth a cumulative E360bln, possibly tapering in a linear way, but more likely via a reduced monthly rate of E30bln, QE cease by end-2018.
* Citi: More bearish view of between E150-E200bln envelope for 1H-18 or a similar hawkish surprise like E20bn for 9-mth.
* HSBC: Base case is for ECB to reduce QE to E40bln p/m with a 6-mth extension.
* Morgan Stanley: ECB to cut purchases to E30bln p/m for 9-months without a firm end date, but further extension limited due to 33% limit.
* Nordea: Expect ECB to announce a 6-month extension of QE at E30bln p/m and no change to forward guidance.
* Lloyds: Expect ECB to reduce QE to E30bln p/m until Sep and leave option open to boost QE if needed and leave sequencing unchanged.
* Commerzbank: Expect ECB to reduce QE to E30bln p/m for 9-months, But Draghi will also generously prescribe various tranquillisers; No end date, no rate hike, continue reinvestment proceeds and ECB willingness to react if needed.
* Pimco: Expect ECB extends QE by 9-mths at E30bln p/m without committing to end date. Strengthen commitment to keep rates/balance sheet unchanged when QE ends. Think ECB raise deposit rate by 15bp in mid-2019 & reduce b/s from 2020 onward.
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