###POV: Although there is a strong case for.....>

ECB: ###POV: Although there is a strong case for the ECB to deliver a new TLTRO

to avoid a 'funding cliff' for eurozone banks, this is likely to still be in the

discussion stage. Assuming that the ECB uses the March meeting merely to signal

that TLTRO extension is in the pipeline, the focus will shift to the official

forecasts. Downgrades to GDP growth and inflation are unavoidable in light of

the deterioration in economic activity. However, significant revisions to the

2020/2021 projections are unlikely as this would signal a significant shift in

monetary policy.

- Baseline: ECB signals that a new TLTRO is on the cards. Significant forecast

downgrades for 2019 and limited adjustments to the 2020/2021 projections. No

change to the forward guidance.

- Dovish surprise: The ECB pre-commits to a new TLTRO, effectively teeing up for

implementation in April. Significant downgrades to 2020/2021 growth. Extends

forward guidance on interest rates. Discussion of deposit tiering.

- Hawkish surprise: The ECB downplays the need for a new TLTRO and forecast

revisions are minor. Reiterates existing interest rate forward guidance.