Nomura Research discusses its expectations for tomorrow's ECB policy meeting.
"We don’t expect the ECB to make any monetary policy announcement at its September meeting. We expect the ECB to address the recent euro area negative inflation print and the euro’s appreciation," Nomura notes.
"The ECB is unlikely to act on disappointing inflation yet, but we think that if the ECB decides to do so, the PEPP, rather than rates cuts, would be the preferred instrument. The benefits that a 10bp rate cut would bring to inflation at these levels are marginal, notwithstanding its beneficial impact on the euro," Nomura adds.