ECB’s QE exit will be gradual – UOB

FX Strategists at UOB Group assessed the recent ECB meeting and gave their views on the potential next steps by the central bank.

Key Quotes

“Overall, we stick to our call that any exit will be gradual. We expect the start of tapering to be announced sometime this year”.

“There are 3 more remaining meetings in 2017. We think the 7 September meeting does seem a little early at this stage. The ECB could use that meeting though to announce the committees tasked”.

“Waiting after the September meeting also allows the ECB to wait until after the German elections on 24 September. Hence, the 26 October and 14 December meetings seem more likely, although we think the December one might be considered too late”.

“Of course, a “taper tantrum” could delay any decision further. Meanwhile, we do not think that there will be any rate hikes this year or next, in line with the current forward guidance on rates”.