Capital Economics: ECB Meeting Review

Quotes from Capital Economics

• After leaving policy on hold today, the ECB is likely to play up the effects of the QE programme announced in January - but it faces an uphill battle against the threat of deflation.
• With the new asset purchases due to begin this month, President Draghi should expand on the details in the forthcoming press conference (13.30 GMT). 
  
  
• We already know that the Bank plans to buy about €1.1trn of government bonds, European institutions' debt and private sector assets between now and September 2016. But any indication that it will focus on long maturities or buy anything but the safest assets could increase the likely effectiveness and hence go down well with financial markets. 
  
  
• The President may also reiterate that purchases could continue beyond September 2016 until the Bank sees "a sustained adjustment in the path of inflation". It is unclear exactly what this means, but we see a significant risk of deflation that seems to warrant more policy support than is currently planned.