JPM on ECB
1. ECB Rate decision(Slightly dovish): Overall the decision was mixed but in aggregate more dovish than anticipated (because of the forward guidance), especially following this week’s repricing by the market.

2. Rates(Hawkish): Smaller than anticipated cut(-10bps while markets were pricing approx. -14bps)

3. Forward Guidance(Very dovish):Rates will now stay at present or lower levels at least until inflation converges to target(which could take a while). calendar date is gone and it’s now an open ended commitment

4. Quantitative Easing (Mixed): ECB will resume asset purchases in November and will buy EUR20bn in Bonds permonth “as long as necessary”. The number wasn’tthe most dovish outcome expected (consensus was around 30bn) but the “as long as necessary” part is clearly extremely supportive (almost sounds like an old “whatever it takes”).Draghi also said there was a broad consensus (significant majority and no need for a vote) on QE.

5. Tiering (dovish):ECB will introduce two tier system for bank deposits. Essentially, banks can keep 6 times their required reserve levels in the ECB current account facility, which will be remunerated at 0%. This multiplier is subject to change.The two-tier system will first be applied in the seventh maintenance period of 2019 starting on 30 October 2019. Details here

6. TLTROs (dovish):Conditions will be even more accommodative than they were, lengthening the maturity of the loans and making the interest rates on them more favorable.Banks will be able to repay new TLTRO loans early after two years.Draghi also saidthere was a broad consensus on TLTROs.

7. Growth(dovish): They lowered forecasts for 2019 at 1.1% v 1.2%; 2020: 1.2% v 1.4%; 2021: 1.4% was unchanged. (They also said that these forecasts don’t take into account a hard-Brexit scenario)while announced that Risks remained tilted to the downside. They said the slowdown comes from the trade environment, which is especially impacting the manufacturing sector while the Services and Construction sectors shows resiliency. Draghi also said the probability of recession was low, although has gone up