Goldman Sachs need only two questions answered on Thursday

  1. Will there be a formal taper decision?

  2. If not, will Draghi hint that one will come soon?

If the answer is yes then EURUSD would go up substantially. However, their base case remains that QE remains in place at the current rate into late 2017.

They also comment on the scenario where the ECB might decide to pump at lower for longer.

"Some have been discussing scenarios that aim to split the difference for the ECB, for example tapering purchases to a monthly pace of EUR 40-50 bn, but then extending the program for longer, say through Q1 2018. We think such proposals fail to take account of how skeptical markets have become where the ECB is concerned. After all, the December 2015 meeting and the misfire in March of this year have taught markets to be extremely skeptical as to the ECB's willingness and ability to ease."

It looks they've got all the bases covered in this one ;-)

I'm still favouring the lower for longer approach as it keeps a dovish/easing bias whilst naturally tapering. To a certain extent, the end date doesn't really matter, that can be kicked or shortened as much as they like. If we do see a pronounced pick up in inflation in the new year then they'd already be halfway there with the lower purchase amounts.

Lastly, it's not 100% definite that we get the full workings at this meeting. They could punt by saying that they have their plan but they'll wait until the new year before giving us the numbers to go with it.

Either way, I still think the euro is going to be a screaming buy on a decent ECB (and following Fed) induced dip, to run next year.

Our mates at eFX once again with the note.