This is UBS with what they expect from today's European Central Bank monetary policy meeting and news conference

(bolding for emphasis is mine - as you'll see UBS is looking for developments from the ECB, but not at this meeting)

Bullish macro data, the recent hawkishly-perceived ECB minutes, an appreciating Euro, and higher yields and oil prices promise to ... ECB meeting more interesting than previously anticipated.

  • Indications are growing that the ECB will soon start to shift the focus of its communication away from QE and towards interest rates (forward guidance) as the key instrument to support the inflation recovery; this would also imply that the QE easing bias is becoming less important.
  • While the focus on interest rate forward guidance is thus likely to increase, this in itself does not mean, in our view, that the first depo rate hike should be expected earlier than previously assumed - we still expect it for July 2019. Obviously, if the data were to remain strong, the ECB might eventually start hiking earlier, but this is not a decision it has to make soon - it can wait for another few quarters and then decide in a data-dependent way.

Our monetary policy call is essentially unchanged:

  • we expect the ECB to conduct monthly asset purchases of €30bn until September 2018, but then wind down QE.
  • In light of very strong data, a final moderate extension of QE in Q4 2018 seems very unlikely by now.
  • As before, we expect key interest rates to be hiked only after the end of QE, most likely as of July 2019; but we acknowledge that a continuation of very strong data could skew the risk towards a somewhat earlier rate hike.
  • We expect the ECB to continue to reinvest maturing securities of its QE portfolio for the next few years, i.e. well beyond the start of the rate cycle.
  • The overall monetary policy stance is likely to stay accommodative for the foreseeable future, as the ECB balance sheet is going to stay very large for another decade; extensive amounts of excess liquidity imply that the deposit rate is likely to stay the de-facto policy rate for years to come.

We expect President Draghi to be asked to comment on what the latest increase in oil prices and euro appreciation mean for the inflation outlook.

  • In our view, the net impact of the two factors on the ECB forecasts should be broadly neutral as they cancel each other out.

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ps. earlier previews from banks at these links: