Full ECB Preview: Draghi Parting Gift - A Bazooka Or A Water Pistol?

Tomorrow, at 13:45am CET (7:45am ET) the will unveil its Draghi "Swan Song" Monetary Policy Decision, with a press conference Due At 13:30BST, (08:30ET)

• Surveyed analysts look for the ECB to cut the deposit rate by 10bps with the Main Refi and Marginal Lending rates seen unchanged
• Markets currently price in around a 40% chance of a deeper cut to the deposit rate of 20bps
• Focus will be on any potential complimentary easing measures alongside expected rate reductions
• ECB staff economic projections will likely reflect the downbeat prospects for the Eurozone economy

INTRODUCTION

Will outgoing ECB president Mario Draghi's "swan song" decision - the one in which he is widely expected to cut rates deeper into negative territory and resume sovereign and/or corporate QE - be a bazooka or a waster pistol? That's the question.

Markets currently fully price in a 10bps reduction in the deposit rate to -0.5% with just over a 40% chance of a deeper cut of 20bps.

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