Rabobank analysts think that the ECB’s Governing Council will use the July meeting to steer towards a rate cut in September.

1. “Policy rates:

• We expect forward guidance to be updated to signal a rate cut, e.g. “The Governing Council now expects the key ECB interest rates to remain at their present or lower levels [...]”
• We think that this would herald a 10bp rate cut in September. Additionally, we see 3 follow-up cuts in the coming 12 months.
• Draghi signaled that further rate cuts would be accompanied by some form of mitigating factors. We believe a tiered deposit rate is the most feasible solution.

• We don’t expect changes to the reinvestment program or its forward guidance, nor do we anticipate the ECB to restart net asset purchases at this stage.”