Euro: The ECB meeting is on Thursday … Here are 5 things to look out for via ForexLive

I posted earlier on the upcoming ECB meeting on Thursday:

Euro: The ECB meeting is on Thursday … but … “What would ECB disappointment look like?”

and Previews and positioning from Citi and Morgan Stanley

Where we are at:

• Draghi's speech at Jackson Hole on August 22, warning about reduced inflation expectations raised hopes hopes the ECB may announce additional stimulus measures
• Then, last week we got eurozone inflation to 0.3% in August, well below the ECB's 2% target

So, here are five things to watch on Thursday (via the Wall Street Journal) (bolding is mine):

1. Draghi said in Jackson Hole that the ECB's preparations to buy asset-backed securities are moving fast. He could take that a step further and announce that the ECB has formally agreed to go forward
2. The ECB could send a stronger signal by adding other securities to the mix such as mortgage-backed securities and corporate bonds
3. Quantitative Easing … But economists see it as unlikely for now. The ECB may want to see the effects of the new four-year bank loans before weighing QE, which is unpopular in Germany
4. A small minority of economists—four out of 47 in a WSJ survey–expect lower interest rates. But this would undermine Mr. Draghi's statement in June … that the ECB had “for all the practical purposes…reached the lower bound”
5. The Euro has fallen more than 6% against the U.S. dollar since May. Mr. Draghi probably likes what he's seen. Last month he veered from the standard mantra of central bankers that they don't comment on exchange rates and launched into a list of reasons why the fundamentals for a weaker euro were “much better than they were two or three months ago.” Thursday's press conference will be eyed for any additional thoughts on the euro.

Link (ungated)

posted via ForexLive