With a multitude of problems facing the euro zone, European Central Bank (ECB) chief Mario Draghi last month called on European policymakers to work together to make the region more resilient.
Draghi added the central bank was ready to do its part, which many market watchers took to mean that more stimulus is forthcoming at the ECB’s meeting later this week.
Michala Marcussen, chief economist at Societe Generale, wrote in her morning note on Monday, the key actions from the ECB are likely to be a cut in the deposit rate and an extension of the targeted longer-term refinancing operations.
“We do not expect the pace of asset purchases to be increased,” she wrote, adding, “Our main concern is that, whilst the bank will continue to signal its willingness to do whatever it takes, its ability to provide further significant stimulus is becoming more limited.”
