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Oct 25 - 10:55 AM

EUR/USD: ECB: Beyond The Rate Hike; Will Hawkish ECB Be Enough To Support EUR On Thurs - BofA

By eFXdata  —  Oct 25 - 09:45 AM

Bank of America Global Research discusses its expectations for this week's ECB policy meeting on Thursday. 

"We expect the ECB to hike 75bp this week with a clear signal of more to come, in line with recent communication and market pricing. We argue it is too early for QT (quantitative tightening), but the language around APP (Asset Purchase Programmes) reinvestments is likely to change, preparing the ground for discussions. An announcement on punitive tiering or changing TLTRO (Targeted Long Term Refi Operationsterms seems likely to us, even if the details follow later," BofA notes. 

"In FX, we do not believe the hawkish ECB steps and tone will be enough to support the EUR, given market expectations and remaining challenges," BofA adds. 

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Source:
BofA Global Research

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