EUR: No Action From ECB This Week; Risks From A Dovish Tone, But Not Sustained - BofAML

Bank of America Merrill Lynch Research discusses its expectations for this week's ECB April policy meeting on Wednesday.

"We expect no action from the ECB this week, but the attention will likely be drawn to questions about targeted longer-term refinancing operations (TLTROs), tiering, low for longer, and room for further cuts. We would not expect many answers at this point, but we may get some hints of what lies ahead on timing and details of TLTROs, sideeffects of monetary policy on banks, tiering, and potential cuts," BofAML projects. 

"The EUR has weakened following a dovish tone in recent ECB meetings and this is also a risk this week. However, the impact has not been sustained. The main driver of the EUR has been the weak Eurozone data. The ECB tone and policies are data-driven and this is what will determine the EUR outlook for the rest of the year...Bottom line, data are still the main driver and we expect Eurozone data to improve from a low base in the months ahead," BofAML adds.