SEB Research discusses the reaction to today's ECB policy decision.
"The outcome of the October ECB meeting was fully in line with our expectation. The ECB left all policy parameters unchanged - including forward guidance, where only the sentence referring to the 01 Oct adjustment of the monthly QE pace to € 15bn was deleted. Importantly, the ECB maintained its prior assessment of the EZ growth/inflation outlook as broadly balanced despite acknowledging that recent data had been somewhat weaker than expected and that uncertainties relating to protectionism, vulnerabilities in emerging markets and financial market volatility remain prominent“," SEB notes
"Focus now shifts to the final 2018 Governing Council meeting on 12/13 Dec. This meeting should be closely-watched for at least three reasons. First, it will bring updated ECB Staff projections which we suspect will be slightly lower for growth, at the least. Secondly, the Governing Council will inform the public about its decisions regarding the future QE re-investment policy. Related to this matter, the ECB should also present its updated capital key, including the effect of Brexit. Forward guidance on rates policy will remain unchanged until spring into 2019, in our view," SEB adds.