Halister News

(Bloomberg) -- ECB to cut deposit rate by 10bps at March meeting; any more would probably meet resistance from several members who have concerns about possible negative on banking sector, Goldman Sachs economist Dirk Schumacher writes in note.

• Also expect an announcement of tiered rate system for reserves, even as the new system will probably become effective only at a later stage
• Volume of monthly purchases to be increased by EU10b to EU70b
  • While parameters of PSPP will be left unchanged, Draghi will stress that those can be changed if necessary
  • Next question ECB will face is how to address the scarcity of German sovereign bonds; any decision on this not imminent
• CPI and GDP revisions will lead to a clear majority in GC in favor of further policy easing; this year’s inflation rate will probably be revised down to -0.1%
• NOTE: Any ECB cut won’t worsen poor liquidity, JPM rates co- head says