ECB: 4 things to watch - ING

"The stronger euro has made the ECB’s taper tiptoeing even more complicated," says ING Economic and Financial Analysis Team.

Key quotes:

"Growth with a bit more inflation: Strong economic growth looks to continue into 2018, albeit at a slower pace than 2017’s first half. The recent uptick, from increasing oil prices, was still below ECB’s target and is likely to fall again."

"Is it already Autumn? In July, Draghi said the ECB would have discussions on QE beyond December, in the fall. The strong euro may see this postponed to late October."

"ECB in the euro trap: The ECB has been struggling to find the right narrative and timing for tapering, which has been further complicated by a strong euro. Spelling out the tapering game-plan could lead to a stronger euro, undermining the Eurozone’s recovery."

"Tapering is (almost) unavoidable: The only way to credibly reverse the recent euro appreciation would be to postpone tapering. But, bond scarcity has meant some kind of tapering in 2018 is almost unavoidable."