###POV: Given the strength of some of the.......>

ECB: ###POV: Given the strength of some of the recent dovish commentary from the

ECB - particularly Mario Draghi's now pivotal Sintra speech - a shift towards

further easing appears to be underway. In order of implementation difficulty the

ECB could: introduce a dovish bias to forward guidance, cut the deposit rate,

introduce a tiered deposit system, and/or restart QE. Given the need to iron out

the technicalities of a substantial easing package, and to further assess the

path for growth and inflation, the ECB is likely to use the July meeting to

signal its intent to ease in September.

- Neutral: The ECB adjusts its forward guidance and hints at the possibility of

resuming asset purchases. Adjusting forward guidance alone would be a mild

disappointment for the market.

- Dovish surprise: The ECB adjusts its forward guidance, cuts the deposit rate

by 10bps, introduces tiering and is more explicit in indicating that a QE

package will be delivered at the September meeting.

- Hawkish surprise: No change in forward guidance, with the ECB reiterating that

it stands ready to adjust all of its policy tools as necessary.