ECB likely to extend QE purchases beyond 2016

Euro area economy does not seem to dip back into the deflation in September as sufficient reason for the ECB to step up its accommodative monetary policy in October. 

However, the ECB is likely to extend its QE purchases beyond 2016, but to remain on hold at least until December, and possibly until Q1 2016, states Danske Bank in a research note. This reflects, among other things, the comment made by Draghi in September 'We may see negative numbers of inflation in the coming months'. 

A trigger for an extension of the QE purchases could be a downward revision to the ECB's inflation projection. Especially because the ECB expects the core inflation to rise to 1.4% next year, added Danske Bank.