ING Research discusses its expectation for next week's ECB June policy meeting on June 14 and expects it to be a prelude to an ECB announcement in July meeting to end QE extension by December.
"Next week’s ECB meeting will be an exciting one. Even though some market participants will take today’s comments by Praet as a prelude to a decision next week, we still don’t think the ECB will easily give away flexibility and room for manoeuvre on QE in a situation where downside risks to the economic outlook have increased and political risks (be it from Italy or later this year from Brexit) could easily reemerge. Against this background, clear hints at an end of QE, while keeping full flexibility, at next week’s meeting still seems the most likely outcome.
Then, the July meeting could bring the announcement of a QE extension at a lower pace at least until December. If underlying inflation really creeps up in the second half of the year, QE could then be stopped in December. Even though there seems to be a general understanding on an end to QE, the devil is definitely in the detail," ING argues.