Investors Gave Up on ECB Policy Changing
Analysts say ECB will stand pat at its next week’s meeting, despite the fact that earlier they were betting on some policy change. Mario Draghi is expected to be just as careful and laconic as usually, trying to prevent market volatility. Kristian Toedtmann (economist at DekaBank in Frankfurt) explained: “Some council members seem very concerned that small changes in the ECB’s communication might provoke overly strong market reactions. Therefore, the ECB should reduce its forward guidance on asset purchases only to the extent that it is able to strengthen its guidance on policy rates.” Asset purchase program is expected to be announced at or before June and no rate hikes will be executed for a long time after the announcement.