ECB Preview: A Difficult Balancing Act, Under the Sword Of Damocles
The Governing Council’s decision in December is going to be one of the most difficult since the introduction of QE at the beginning of 2015. This analysis builds on our recent ECB impressions and an analysis of the Italian scenario, discussing what the ECB could do, given the different circumstances it might need to face. Attention is focused on the decision to extend QE beyond March 2017. Other measures are likely to be adopted as part of a package, including tweaks to forward guidance, but we consider the modalities of QE extension to be the key focus.