ECB unlikely to change its bank rate

Euro area core rate (ex food, energy, alcohol, tobacco) remained at 1% y/y and headline inflation rate remained at 0.2% y/y in August, according to the flash estimate, despite the steep drop in oil prices. All in all, inflation pressures are still very low. 

"The headline rate is expected to fall to zero in September and October and it is expected to closer to 1% by the turn of the year. Therefore, no changes to the interest rates and no significant changes to the purchase programs is expected", foresees Nordea Bank.  

Mario Draghi will repeat that the ECB stands ready to use all instruments available within its mandate if the inflation outlook changes materially, adds Nordea Bank. That is, he will most likely not say that the outlook has changed materially. Not yet. At the moment the EUR 60 bn monthly purchase pace is seen as sufficient.