ECB meeting to be a straightforward placeholder meeting - TDS

Today's ECB meeting is likely to be a straightforward placeholder meeting, given the recent changes made to the forward guidance language and given the lack of projections with which to assess the impact of recent soft activity data, according to analysts at TDS.

Key Quotes

“A change to the ECB's language on upside risks to growth is likely to be the most important change to President Draghi's opening statement.”

“FX Strategy: We do not think the April ECB meeting will give the EUR a strong directional push. We think EURUSD is likely to remain well anchored within recent ranges, but we do see some upside potential for EURCAD in the wake of this week's dovish BoC outcome.”

“Rates Strategy: Markets seem well-positioned for a "cautious" approach to monetary policy. Therefore, we prefer going into the meeting with a neutral to a mildly bearish view. We continue to favour short 10y Bund ASW as well short 10y Bund real yields vs US recommendations in our trade portfolio. In the shortend, we take profit on our long June-19 Eonia recommendation but maintain our 2y2y vs 1y OIS flatteners.”