ECB watcher, Frederik Ducrozet at Pictet........>

ECB: ECB watcher, Frederik Ducrozet at Pictet Asset Management addresses the

question of ECB asset purchase options in 2018. He remarks that "Our baseline

scenario remains for asset purchases to be scaled down to

EUR40bn for six months, before being wound down to zero in the course of

H2 2018".

- Ducrozet says that the final decision will be influenced mainly by the ECB's

assessment of wage and price dynamics and what they think of financial

conditions, particularly the impact of the FX rate.

- "If the EUR stabilises below 1.20, close to staff assumptions, we expect the

baseline scenario to hold. We also envisage a change in QE composition including

a higher share of corporate and supranational debt purchases. A sharper EUR

depreciation towards 1.15 or below could lead to a faster tapering"