Key Points:
Guidance to Remain Cautious:While policymakers may acknowledge the possibility of further easing below 2%, BofA expects no explicit pre-commitment, due to ongoing global trade and inflation uncertainties.
Market Implications:BofA maintains a bullish bias on Euro area duration (bonds) due to expectations of a lower terminal policy rate.However, they view the ECB meeting as a non-event for the EUR, with greater focus on US economic data and European reform momentum.
The ECB is likely to tread carefully at this week’s meeting, avoiding strong forward guidance amid external risks. With a rate cut already in the price, the euro should remain stable, and traders are advised to look elsewhere—particularly US data—for near-term EUR/USD drivers.
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This article was written by Adam Button at www.forexlive.com. Read More Details
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