ECB to leave policy unchanged

The European Central Bank is expected to leave policy unchanged and focus on the impact of its QE program after one month of implementation. The ECB's policy meeting (Wednesday) and subsequent press conference will be the focus in the coming week. President Draghi will likely indicate that ECB QE has got off to a good start, re-iterating the Governing Council's commitment to its inflation mandate. 

Indeed, after a full month of the recently launched QE program, economic data have improved and European equities have outperformed, against the headwind of Greek political uncertainty and helped by steadily declining euro area rates. 

Moreover, the recent stabilization in energy prices has helped stabilize inflation. Yet, inflation expectations have been range-bound since the start of the QE program, suggesting a stronger commitment to low interest rates for the foreseeable future until inflation returns to mandate-consistent levels.
 
"On the basis of poor returns to capital in the euro area and lower-for-longer rates, we continue to expect modest EURUSD depreciation", Said Barclays in a report on Monday