Recent Euro area data have been stronger than expected, suggesting some upside to the near-term growth trajectory. Expectations run high that the ECB will implement broad-based easing. Rather than a fine-tuning step the ECB seen as responding to a fundamental shift in its assessment of risk. It is clear that Draghi wants to get inflation back to the central bank's objective as quickly as possible and is worried that EM and geopolitical risks will make this less likely. 

There are two key transmission channels that the ECB is working through-the level of the yields at the short end of the curve and the euro's value. In making choices around how to act, Draghi would like to see sustained declines on both fronts. This desire, along with some uncertainty about the impact of different instruments in such a low-yield environment, motivates action on both the deposit rate and the size of purchases. It is believed that there is plenty of room to do more on both fronts. 

Experiences elsewhere in Europe suggest that the lower nominal bound is well below the current -20bp level. There is also plenty of sovereign debt to purchase before the ECB would need to think of expanding to additional asset classes. 

"Our baseline view is that this will be the last ECB ease, but we recognize that the medium-term inflation path is likely to remain below the ECB's current projections", says J.P. Morgan Research.