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On Thursday, the European Central Bank is likely to maintain the wait-and-see mode adopted in September and buy time to collect data ahead of the December meeting and the new staff projections.
Nevertheless, the risks to the European economic outlook and disparities across countries are rising again with a strong increase in new infections and renewed containment measures. In addition, latest inflation data have been disappointed.
Hence, the central bank should signal that it stands ready to provide additional easing if the crisis worsens. We think the ECB will let all the options opened until the next meeting. We also expect Mrs. C. Lagarde to emphasize the importance of the coordination between fiscal and monetary policy and push government to do more to lift the euro area economy.
All in all, this meeting shouldn’t have material impact on financial markets.
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This commentary is intended for non-professional investors within the meaning of MiFID II. It is provided for informational and educational purposes only and is not intended to serve as a forecast, research product or investment advice and should not be construed as such. It may not constitute investment advice or an offer, invitation or recommendation to invest in particular investments or to adopt any investment strategy. Past performance is not indicative of future performance. The opinions expressed by La Française Group are based on current market conditions and are subject to change without notice. These opinions may differ from those of other investment professionals. Published by La Française AM Finance Services, head office located at 128 boulevard Raspail, 75006 Paris, France, a company regulated by the Autorité de Contrôle Prudentiel as an investment services provider, no. 18673 X, a subsidiary of La Française. La Française Asset Management was approved by the AMF under no. GP97076 on 1 July 1997.