Thursday preview: ECB releases monetary policy account amid QE speculation

All eyes will be on the European Central Bank on Thursday as the monetary authority publishes its account of the latest policy meeting and as President Mario Draghi attends a key event in Washington.

In the wake of rumours that the ECB is looking to wind down its €80bn monthly bond purchases before ending its quantitative easing programme, investors will be closely scrutinising the monetary policy accounts of the September meeting for clues on the central bank’s future plans.

The ECB held policy rates unchanged in September and decided against extending the asset purchase programme despite new forecasts showing that inflation is expected to undershoot the 2% target by a wide margin.

At the press conference after the policy meeting, Draghi refused to answer questions on how the asset purchase programme might be altered in future. However, he said ECB staff committees have been tasked with finding ways of continuing the programme given the technical constraints.

“With this in mind, the minutes could shed more light on when the committees might be reporting on their findings, which could indicate whether the announcement of the extension might happen at the October meeting, or in December,” HSBC said.

“We might also see whether, as Mr Draghi claimed, there was no discussion at all on possible ways to overcome the technical constraints. Mr Draghi also claimed in September that the monetary transmission channel 'had never worked better' in the eurozone, and it will be interesting to see whether there was full agreement in the council on this, given that while the spread might be narrowing, lending growth is already slowing in countries including Spain and Italy.”

At the same time, Draghi meets with other central bank leaders and G20 finance ministers at a working dinner in Washington ahead of annual meetings of the International Monetary Fund.

They will discuss the main risks to global economic growth and how to crack down on the secretive ownership of companies that allows for tax avoidance and money laundering.

Thursday 06 October

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Continuing Claims (US) (13:30)
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