When ECB meets next week, the market attention turns to the implications and new communication on the back of the new strategic framework. We do not expect new policy signals coming from the change in language.
We expect an acknowledgement of the improving data which has come in according to expectations and the positive contribution from the roll-out of the vaccines, however risks will also be mentioned, notably the by-now dominating Delta variant with a reference to still uneven and fragile recovery.
With markets having to adjust to the new communication style and potentially also new language, there is risks of larger than usual market moves, although such moves should not be over-interpreted, especially in a less liquid seasonal summer market.
We expect new policy signals after summer on issues such as bond buying, but are open for TLTRO liquidity operations to be coined standard already at the upcoming meeting.