"The Governing Council is not closer to being able to demonstrate convincingly that its current policy settings are compatible with headline inflation returning to target by the end of the forecast horizon.

We look for three ECB policy announcements:

1- We think extension of asset purchases for at least six months would be a first step in the right direction.

2- alongside changes to QE modalities to circumvent any scarcity issues.

3- We also expect a 10bp cut in the refinancing rate to -0.1% to be the first step, ahead of a 10bp cut in the deposit rate to -0.5% in March 2017".

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