Bank of America Global Research discusses its expectations for next week's ECB policy meeting.
"The ECB will not taper the PEPP next week, but this is still not sufficient. A number of ECB speakers, including Lagarde, have recently pushed against PEPP tapering expectations in next week’s meeting. They also expressed concerns about rising yields and EUR appreciation, both of which have led to tighter financing conditions, which is what the ECB was supposed to defend," BofA notes.
"Such comments have stabilized the EUR, but have not been enough to weaken it. Not slowing the current pace of purchases avoids a policy mistake in our view, but is not enough to reverse the recent market trends," BofA adds.