ECB to lower inflation path in September

The minutes of the July ECB meeting signaled cautious optimism that ECB QE was helping to improve confidence and expand credit. But they also emphasized that downside risks were still elevated, given a weak inflation outlook and fragile recovery (for example, euro area IP shrank in Q2, and growth came in a little below consensus at 0.3% q/q). 

Even more so than the Fed, the ECB is likely focused on the EM slowdown, commodity price drops, and the effect of recent China moves on medium-term inflation stability. And both the central bank are likely closely watching the drop in medium-term inflation expectations. The ECB might lower its inflation path at the September meeting, states Barclays.