The ECB's monetary policy decision is due at 1145 GMT
Everything is falling neatly in place for the ECB ahead of today's central bank meeting. The euro isn't surging all too much that it hurts the inflation outlook further. Economic growth isn't receding to a point where a major slowdown is seen on the horizon. And markets have interpreted their forward guidance accurately and leaves them ample of room to tweak it next year if need be; money markets only have a full rate hike priced in by October 2019.
Are there things that they wish were better at this point? Most definitely. But right now the focus is just getting over the finishing line when it comes to QE. With that being the main goal, there is no reason for the ECB to change anything when it comes to language or policy in today's meeting.
To play it safe, Draghi & co. may just reaffirm that they expect QE to end in December but in all likelihood we're staring at a period where the central bank is almost certainly going to confirm it. In doing so, it opens up room for them to explore normalising policy in the future without having their hands tied and that is the ultimate objective right now.
Hence, I don't expect Draghi to talk up risks pertaining to Italy - the language should remain 'broadly balanced' or that of global growth taking a toll on the Eurozone economy. No doubt those risks are very real and could cloud economic outlook as we head into next year, but it's not enough to derail the ECB's plans from its tracks just yet.
It would take a much further deterioration in economic sentiment for the ECB to change course and though the initial signs are there (looking at you, Germany), it's not enough to warrant hitting the pause/panic button.
The other issue that would warrant some consideration - and arguably the most important one - is the inflation outlook. Core inflation for September remained subdued coming in at +0.9% y/y and that's not suggestive of a healthy inflation outlook in the Eurozone economy in a time when the central bank wants to move forward with more aggressive policies.
But for the ECB, they are also paying attention to inflation expectations. And although Eurozone inflation expectations have dipped to seven-month lows, it's holding at around 1.7% and that's still rather ideal for the central bank as their goal is to keep inflation close to but just below 2.0%.
Unless disinflationary pressures start cropping up again and start sending core inflation close to 0.0%, once again there is no reason to panic just yet.
It's all about putting an end to QE right now for the ECB so even if economic signals aren't the healthiest, I don't see the need where they need to rock the boat today. That said, I expect Draghi to reaffirm the same risks and forward guidance/language as we saw previously as tilting to the dovish side would throw the market off in terms of policy expectations from the ECB and tilting to the hawkish side would be foolish considering that economic signals aren't supportive of that.
However, if Draghi had to pick a side, I reckon he'll be more comfortable with a dovish message because at least a weaker euro will help bolster the inflation outlook a little.