Bank of America Global Research previews this week's July ECB policy meeting.

"We expect the ECB to leave policy rates unchanged this week. With no large surprises in data (inflation a bit weaker but activity data still showing a resilient economy) and energy prices not far from the ECB’s baseline forecasts, there is not enough sense of urgency to move policy rates now. Focus, as usual, will be on communication. But also, as has been the case over the last few meetings, we expect very little new from the ECB, either in the statement or from Lagarde during the press conference. The written communication is likely to stay close to what we had in June, hence keeping a hiking bias given that the June forecasts included more hikes than just the one that month," BofA notes.

"As a reminder, we expect one final hike from the ECB in September. A hold is not unthinkable: with oil prices around USD 70/bbl, the case for the ECB to pause had strengthened considerably (although it was not our base case)," BofA adds.