ECB policy meets review

Today European Central Bank (ECB) is to provide further guidance in policy meet. Result to be announced at 12:45 GMT, followed by press conference at 13:30 GMT. Meeting is to be held in Cyprus.

Current policy -

• Deposit facility rate at -0.20 percent
• Refinancing rate 0.05 percent
• Marginal lending facility rate at 0.30 percent
• ECB started its asset purchase programme of € 60 billion from this month

What to watch out for -

• Change in growth and inflation forecast by the ECB staff as QE kicks in.
• Details on the purchase operation the like directly buying from the trading platforms?
• How the key ratio to be maintained like monthly basis?
• ECB's view on the negative yields
• The reporting frequency of the purchase would be very vital. Weekly reporting would influence market a lot more.
• What will be the average duration of the portfolio? Will move the yield curve.
• ECB's view on the effect of liquidity in the bond market due to the purchase.
• ECB's view on the Greek situation and its stance.
• View on potential cost and risk of the purchase.
• Decision on Greek bonds as collateral.
• ECB's view on recent positive data.

Impact -

• Major focus is on Euro and the Euro zone bonds. Euro is trading at 1.104, down 0.34 percent for the day.
• Euro is breaking into new low against the dollar in today's trading but yet to break the important 1.10 level but can break that over the decision and conference.
• Euro would be bearish if ECB shrugs off the fear over potential cost associated and seem determined to be dovish over quite a long time.
• Bond yields would try to get queue more from the purchase details, ratio maintenance and reporting.
• Euro could be bullish if ECB seems to be less dovish over the recent positive data on Eurozone and mention earlier possible closing of the purchase.