ECB Meeting Preview

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ECB policy announcement due Thursday 29th October; rate decision at 1245GMT/0745CDT, press conference 1330GMT/0830CDT

The upcoming meeting takes place against a backdrop of a resurgence in COVID-19 which has led to the reimposition of various lockdown measures in the EZ

Policymakers are likely to wait until December to unveil any further easing measures, at which point the GC will have greater clarity on the impact of recent developments

OVERVIEW: Policymakers are once again expected to stand pat on rates with the balance sheet remaining the tool of choice for the Governing Council. Expectations are for an eventual expansion of the current Pandemic Emergency Purchase Programme (PEPP) remit of EUR 1.35trl and extension of its duration, however, consensus suggests that December is viewed as a more opportune time for this action. In December, policymakers will be able to present their winter economic projections and have greater clarity on the impact of various lockdown measures on the Eurozone economy. As such, the upcoming meeting will be more of an opportunity to set the stage for further stimulus, rather than unleash it in the immediacy.

PRIOR MEETING: At the prior meeting, policymakers opted to stand pat on rates, whilst leaving policy settings unchanged for its bond-buying operations, as was expected. The introductory statement noted that incoming data suggested a strong rebound in activity, which was broadly inline with previous expectations, though, ultimately activity will remain at pre-pandemic levels. The GC’s conviction in its outlook resulted in just minor tweaks to the accompanying growth

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