Downplaying talks of QE tapering

In contrast with the previous ECB press conferences held since last summer, when President Draghi kept raising expectations of QE action and then when significant questions remained on the design of QE, the next press conference on 15 April promises to be boring. 

The ECB is set to maintain the status quo on all its policy decisions (interest rates, QE, LTRO etc.). The Communiqué will reiterate that the €60bn/month QE programme will run "until end-September or until inflation converges to 2.0%  medium term". The ECB will be pleased to highlight that it met the €60bn QE purchase target in March, defying some observers' predictions. 

In order to downplay talks of an early QE tapering, President Draghi is expected keep a dovish tone, indicating that the overwhelming majority of the Governing Council wants to implement QE in full. Even though the economic outlook is improving, President Draghi will likely argue that inflation expectations remain very low and that doubts about the sustainability and the magnitude of the current cyclical recovery persist. 

"In view of our still-low inflation forecasts for 2017-18, we expect the ECB next year will have to extend the easy monetary policy for longer, through both asset purchases and liquidity measures", says Societe Generale. 

"Regarding Greece, the ECB will stick to its stance presented in March. Greece will continue to resort to ELA financing of its banks (said to be €73bn), until further clarity is reached at the political level", added SocGen.