Credit Agricole CIB Research discusses its expectations for next week's ECB policy meeting.
"The focus now turns to the 22 July policy meeting as investors try to learn more about the impact of the changes of the ECB’s inflation target on its policy outlook and tools from here. According to Crédit Agricole CIB’s ECB strategist, the updated policy framework should make the Governing Council more committed to its dovish policy stance," CACIB notes.
In particular, this would imply using PEPP and APP, as well as keeping rates low for longer than before. A confirmation of this view by President Christine Lagarde next week would reaffirm the market’s perception that the ECB has turned more dovish and thus boost the appeal of the EUR as a funding currency," CACIB adds.