Bank of America Merrill Lynch Research discusses the ECB policy meeting on Thursday and notes that President Draghi's press conference this week will not be an easy one.
"Still, we would expect Draghi to emphasize that any changes to forwarding guidance will only be gradual and that the sequencing (rate hikes only after net QE purchases are over) is something that will not be altered. Those expecting rate hikes at the end of this year may end up being disappointed.
Finally, we do not expect any major change to forward guidance this week apart from the removal of the asymmetry in QE, which we do not think would be consequential.
On EUR/USD, BofAML still holds the view that the cyclical outperformance of the EUR may have run its course and believes the single currency is vulnerable to comments from President Draghi during the Q&A session who may take the opportunity to address the recent appreciation. The risks are that he sounds more sanguine," BofAML adds.