ECB: The Central European Bank may modify its key interest rate plans (TD Securities)

In an analysis note published yesterday, TD Securities analysts point out that the ECB has threatened to put all policy levers on the table for its meeting this week, but that they are also waiting for a simple announcement of the details of the terms of the TLTRO 3 transaction:

"We expect risks that the ECB may change its key interest rate forecasts.

Any intention to reduce rates could push bunds below -25 basis points.

With regard to the euro's reaction to the forex market, a dovish change would cap recent gains and put new downside risks for the euro (below 1.11) into perspective.

With the dollar now on the defensive in a context of hope for a decline in Fed rates, our hawkish scenario could see the EURUSD enter a new trading area above the resistance level (1.1325)."

For the record, the ECB meeting will take place this Thursday, with the announcement of rates at 13:45 and Mario Draghi's press conference starting around 14:30.