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ECB: ABS purchase will take place - BAML

FXStreet (Guatemala) - Analyst at Bank of America Merrill Lynch explained that Draghi's speech at Jackson Hole was dovish enough to confirm that small scale ABS purchases will take place,

Key Quotes:

“Very likely before year-end, but not to change our view that QE is unlikely to happen within 12 months (a close call and in contrast to our view that more aggressive action by the ECB is warranted)."

"For this week's meeting, we do not rule out smaller measures, such as fine-tuning the upcoming TLTROs or a detailed timeline of how and when ABS purchases could take place, given the need to deliver after the market's reaction to Draghi's speech. However, in our view, none of these would change the outlook substantially."

"The key issue will be to understand how many members of the governing council share Draghi's latest concerns, particularly since his comments on inflation expectations were not included in the original text posted on the ECB website. We believe Draghi will not be able to convince the governing council to adopt broad-based QE just yet. But we think further disappointments in inflation data could do the trick."

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