FXStreet (Delhi) – Research Team at TDS, suggest that they see more two-way risk from this ECB meeting than recently and while they see a 30% chance of a rate cut and/or QE announcement, it is still unlikely until December. Key Quotes “This leaves rhetoric in the driver’s seat. Any language that keeps hope alive for December sees euro and rates lower, but Eurozone data has not deteriorated further since September, so Draghi has no new catalyst to increase dovishness. This leaves some pricing that could be disappointed if Draghi is too optimistic.” “There are a few interesting dynamics this month which we think open significant two-way risks. We could see QE and/or rate cuts now, which would be unequivocally dovish. But as the market has come to price and expect some of this in the coming months, this puts a burden on Draghi’s language to deliver.” “We also think that while we forecasted in August that the ECB would extend/ augment QE by December, if they change QE at this meeting, it would likely be because they have decided to move away from calendar-based guidance as the Fed ultimately did and move to QE infinity. This would simply leave the completion open-ended and show that they will truly do “whatever it takes.”” “Since we raised in September that the ECB could signal rate cuts were back on the table, some ECB members’ comments have softly echoed this and the market has moved to price this in with March Euribor at 100.08. We see a 30% the ECB cuts this week and a 50/50 chance that comes in December.” For more information, read our latest forex news.