ECB preview : assessing the damage
We don’t expect any policy relevant announcement to be made at next Thursday’ s ECB meeting as the members of the Governing Council are still try ing to assess how the economic and inflation outlook has changed in light of latest developments. The “natural†response to the weaker outlook would be a change in interest rate forward guidance . While we expect such a shift in the forward guidance to happen , the Governing Council probably deems it t o o early to make the announcement yet. This is probably also true for the announcement of a new long-term refinancing operation in order to smoothen the maturing of the previous T-LTRO operations. But we should get some color on how pressing an issue this is deemed by the Governing Council.