Most likely though, we might have one rate hike until the end of the 1st half of 2019. Turning to the ECB, the ECB will continue reinvesting the principal payments from maturing securities purchased for an extended period of time, contributing to accommodative monetary policy and favourable liquidity conditions.
Moreover, markets expect the ECB to extend its long-term loan programme to the banking sector (TLTRO). At yesterday’s GC meeting, the ECB left its key interest rates unchanged, while it said it intends to continue reinvesting maturing securities under its asset purchase programme for an extended period of time past the date when it starts raising the key interest rates.