ECB likely to signal close of asset purchase programme by end-2018 at next week’s meeting, says DNB Markets

The European Central Bank (ECB) is expected to signal that the asset purchase programme will be closed by the end of this year at its monetary policy meeting scheduled to be held next week, according to the latest research report from DNB Markets.

The net purchases are seen to be reduced to EUR15 billion. In light of Peter Praet’s speech on June 6, where he signaled that the ECB is becoming increasingly positive that the three criteria for inflation have been met, the ECB is already at this meeting will specify the number of purchases.

However, there is a significant risk that the ECB will delay specifying purchases until July in order to keep all doors open for as long as necessary. As for interest rates, the central bank is expected to stick to its communication that rates will remain unchanged well past the horizon of the net asset purchases.

"We believe that the deposit rate will be raised in September 2019, somewhat later than consensus expectations," DNB Markets commented in its latest report.

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