Quotes from Societe Generale Cross Asset Research:
-The ECB should hold centre stage among central banks at the G10. A 25bp rate cut is expected. It is also expected to announce 2y or 3y long term repo operations. Yesterday, sources had already indicated the ECB was considering 2y maturities and could loosen criteria for collaterals. Moreover, it is expected to downgrade its growth and inflation forecasts.
-Regarding the SMP, although its effectiveness has been called into question, the ECB has no choice other than continue on this path for now. European banks remain fragile. The risk attached to any change would be too high. In short, the ECB should meet market expectations. Nevertheless, a massive relief rally is unlikely.
The material has been provided by Instaforex Company - instaforex.com