ANZ Research (Brian Martin) on the European Central Bank meeting today (Europe time)

In brief:

  • EUR/USD vols imply an uncertain outcome to December's ECB meeting despite a baseline view that current QE will be extended by six months.
  • Whilst modest broad-based growth is in place and headline inflation is recovering, there is no evidence of a pickup in core inflation yet.
  • The focus for the market will also be on any adaptations to current QE rules and, critically, any guidance or hints on when tapering may start.
  • EUR/USD failed to break below 1.05 following the defeat of the Italian referendum. We view rallies as corrective and selling opportunities.

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The ECB announcement is due at 1245GMT (08 December 2016)

Draghi's press conference follows at 0130GMT