ECB to loosen policy before policy review is complete

With little chance of any policy action at the ECB meeting next Thursday, the focus will be on how President Lagarde performs in the press conference and on the scope and timetable for the planned monetary policy strategy review. We suspect that the review itself will be a long, drawn-out affair that will end with only a modest change to the inflation target. And we still expect 30bp of additional rate cuts and a further increase in the monthly pace of asset purchases before the end of 2020.