Frederik Ducrozet at Pictet Asset..........>

ECB VIEW: Frederik Ducrozet at Pictet Asset Management now expects "a 9-month

extension of asset purchases at a E30bn monthly rate along with some changes to

QE composition and reinvestment policy". This is a change from his original call

of 6 months at E40bln.

- In terms of purchases, Ducrozet believes that the ECB must face up to the

shortage of sovereign bonds and increase the share of corporates in a

recalibration. However, he admits that some technical details could be postponed

to the Dec 14 ECB meeting.

- He adds that "Looking for additional sweeteners and surprises, the ECB could

hint at the possibility of new refinancing operations in the future, or an

easing of the terms on existing targeted longer-term refinancing operations

(TLTROs), which will mature between June 2020 and March 2021." But, he admits

that these measures are likely to be kept in reserve for 2018.

- One interesting possible idea that Pictet offers is that the ECB could "commit

to reinvestment for a given period of time, for instance until at least the end

of 2020."