ECB Governing Council likely to ease monetary policy further before year end

The ECB Governing Council is likely to ease monetary policy further before year-end. A first step could be to extend the asset purchase programme until at least a later date than September 2016, which could likely be announced as early as October, to reinforce the forward guidance. 

Increasing the size and scope of asset purchases would be the next step, but it is unlikely to be decided in October unless a bigger shock materializes in the meantime. It is more likely to be decided at the December meeting when the ECB will review staff macroeconomic projections. 

"A cut in the deposit facility rate is possible and could be deployed during the first quarter of 2016 as long as the Fed does not increase rates in December", says Barclays.