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No ECB action expected, only explanations and possible promises made - Adam Narczewski

FXStreet (Łódź) - Adam Narczewski, CFA, Financial Analyst at X-Trade Brokers, XTB beliueves that the ECB shouldn't modify its monetary policy at today's meeting, but might elaborate upon the recently implemented measures.

Key quotes

"Since the last ECB meeting various things have changed on the market. The EUR/USD declined over 200 pips. We learned about the mediocre effects of the first round of TLTRO. We also got worse than expected macro data from Germany."

"Even more, some ECB members suggested that in case the taken measures do not make the situation better, the central bank could think about buying back government bonds."

"Still, on the upcoming meeting I do not expect fireworks from Mario Draghi."

"As suggested previously, the details of the announced bond buyback can be presented. These details should be more interesting and complicated than with the Fed bond buyback as the ECB plans to buy bonds from the private sector (in the U.S it is both the private and public)."

"The market will pay attention to the quality of the bonds to be bought back and its quantity."

"I do not rule out comments (especially during the press conference following the meeting) regarding widening the QE program and adding to it government bond."

United Kingdom PMI Construction above forecasts (63.5) in September: Actual (64.2)

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