Research Team at Westpac, suggests that the ECB meeting dominates the global calendar and the markets are pricing in a 13bp deposit rate cut (i.e. 100% odds of 10bp cut to -0.40% and a chance of -0.45%). Key Quotes “But the ECB’s options go beyond taking the deposit rate further into negative territory. On the QE front they may increase the pace of monthly purchases by broadening the pool of eligible assets, easing caps such as the 33% ownership limit on any one bond issue or issuer’s total outstanding debt and they may even start to buy bonds yielding less than the deposit rate. In light of the Dec meeting we suspect Draghi will be acutely aware that underwhelming expectations can prove counterproductive. As a result, a 20bp deposit rate cut and a notably larger bond purchase program (extra EUR20-30bn) seem likely. Spec EUR shorts are a lot lighter than in Dec, increasing the chances that this time, Draghi reclaims his Super Mario nickname with global markets.” For more information, read our latest forex news.