Research Team at Investec, suggests that two meetings ago in December, the ECB was expected to go big on policy loosening and euro short positions were large and in the event, a 10bp deposit rate cut and a six-month QE extension came (similar to what is expected today) came as a disappointment to markets. Key Quotes “This caused a large position liquidation and a very sharp Euro move higher on the day. Today, it feels like short positioning is less pronounced as investors are still wary of further under-delivery from Dr Draghi - so there is less chance of such a large upside move. In addition, the ECB will be keen not to have a repeat of last meeting's Euro strength, can President Draghi pull the magic easing rabbit out of his policy hat and satisfy market expectations? Today we have the ECB monetary policy meeting, where at 12:45 expectations are for the ECB to announce a further 10bp cut to the deposit rate and an expansion to its QE program. At 13:30 ECB President Mario Draghi will give is usual press conference and give more detail on any additional measures the ECB is undertaking. We could also see a larger deposit cut and some further expansion of the TLTRO program.” For more information, read our latest forex news.