Still mulling more support; exit remains distant

With the news that the US Fed is set to taper its QE programme hitting euro-zone financial markets, President Draghi should provide reassurance about ongoing ECB policy support at the forthcoming press conference. While we do not expect policy changes this month, Mr Draghi is likely to confirm that the ECB is considering various conventional and unconventional policy options. We are still pencilling in cuts in both the main refinancing and deposit rates in September. And if the region remains in recession as we suspect, more long-term loans for commercial banks or support for the ABS market could follow soon after.