ECB meeting coming up Thursday - preview from Merrill Lynch

Merrill Lynch with their preview of Thursday's European Central Bank meeting.

In brief:

• Avoiding more euro re-appreciation is the short run priority for the ECB, as its the weak euro which is QE's most tangible result
• ML expect the ECB to talk dovish - they need to unambiguously recognize the risks to their outlook ... they also need to underline the possibility to do more
• Dovishness should be "the ECB's first port of call for this week"
• Will also point out  the resilience in the real economy data flow & uncertainty over the Fed stance
• ECB may make some minor tweaks to asset eligibility
• ML add that in the medium run the negative risk to consumer prices from the China-related turmoil matters more than the adverse shock on growth