Comments from Goldman Sachs on the next round of easing coming up from the European Central Bank

  • This from European economics group at GS
  • Says Draghi is determined to intensify the fight against low inflation

GS expects more easing at the March 10 meeting

  • Expect a 10 basis point cut in the deposit rate (that will take it to negative 40bp)
  • Expect an extension of the ECB QE programme to September 2017

GS expect these actions will increase volatility and there is potential to lead to unintended tighter financial conditions:

  • "Investors see negative rates as detrimental for banks ...
  • The extension of QE would fuel concerns over the scarcity of German Bunds
  • Raising questions over the long-term viability of the present policy stance"