Citi discusses its expectations for the ECB policy meeting on Thursday.

"The team expects the ECB at its March 11 meeting to sound modestly dovish as i) the ECB is genuinely concerned about the possibility of undue tightening, and ii) this is an opportunity for the ECB to signal some dovishness since the Fed is not pushing back against the rise in yields. Thus, we expect some pickup in ECB purchases without the need to make changes to the purchase programme envelopes," Citi notes. 

"We maintain our medium-term EURUSD bullish view, but still see short-term downside to play out further, as i) divergence in central bank responses to rising yields led US-EU real yield spreads to widen considerably, and ii) we expect the ECB meeting on Thursday to be modestly dovish and some risk premium for dovish surprises could be priced by markets, including for yield spreads to widen further after the slightly hawkish Fed," Citi adds.