Forex Flash: ECB rates expected to remain unchanged – Deutsche Bank

Turning to today's ECB meeting, the market consensus is for rates to remain unchanged. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “We think that the risk is tilted more in the direction of easing of policy, but not in the form of standard interest rate policy. Rather, they think an easing of non-standard, 'credit-easing' liquidity policies is more likely within the next few months.”

Since last month, certain financial conditions have eased including the EUR, which is off its highs, and also a second wave of LTRO repayments which were lower than forecast. The expectation is for Draghi to maintain a cautious tone in his post-meeting press conference.