We expect the ECB to revise just slightly higher its growth and inflation forecasts:
- 2018 Growth forecast from 2.3% to 2.4%
- 2018 HICP inflation forecast from 1.4% to 1.5%
It won’t come as a surprise for the market as ECB macro-economic projections are currently below market consensus.
We also expect the QE easing bias to be removed (“QE can be increased in terms of size and / or duration”): we know the ECB would act if the outlook deteriorates but it is not necessary to be explicit when growth looks very strong. This would be seen as moderately hawkish.
We don’t expect new information about whether or not the ECB is going to go for a sudden stop in September or to taper during Q4 2018.
We don’t expect new information regarding the exact meaning of “well past the end of QE”; the market is currently thinking about 6 months.