Today, European Central Bank (ECB) is to provide further guidance in policy meeting. The result to be announced at 12:45 GMT, followed by a press conference at 13:30 GMT. Meeting is to be held in Frankfurt.

Current policy measures

• Deposit facility rate at -0.40 percent
• Refinancing rate 0.00 percent
• Marginal lending facility rate at 0.25 percent
• ECB buying assets at €80 billion per annum, which to include corporate debt securities.
• ECB has launched four new TLTROs.

Expectation today 

• European Central Bank (ECB) is expected to maintain its current policy.
• However, it is widely expected that the ECB would ease policy further at upcoming meetings.

What to watch out for 

• ECB’s take on the recent rumor on tapering and further easing.

• ECB’s take on Greece debt restructuring. IMF said won’t join Greek bailout without debt relief.
   
• ECB has set up a committee to discuss further steps in monetary policies. Updates on that.

• Does ECB leave the door open for further interest rate cut?

• Does the recent uptick in inflation worry ECB?

• Concerns with regard to Italian banks.

Impact 

The euro is down since the Republican candidate Donald Trump secured a victory in the US election and now a commitment to ease further from the European Central Bank would push it towards parity against the dollar.

We have forecasted that the euro would first reach 1.01 against the dollar, then drop below parity and finally drop to as low as 0.96 against the dollar. The euro is currently trading at 1.079 against the dollar.