(30 April 2020)DAILY MARKET BRIEF 2:Euro GDP, ECB decision in focus.

<p>At its monetary policy meeting today, the European Central Bank (ECB) is expected to maintain the interest rates unchanged, as the ECB’s Q1 Bank Lending Survey showed that companies’ demand for short-term loans rose in the first quarter due to emergency cash needs in the context of the pandemic-hit activities, and the rise is expected to be sharper in the second quarter.</p>
<p>But the ECB could consider expanding its pandemic QE program by up to $500 billion euro in the absence of a suitable outcome from the fiscal policy leg. There are also rumours that the ECB could start buying junk bonds to give a further financial support to businesses which have been struggling with the serious implications of the coronavirus-led economic shutdown. While the dovish ECB expectations are expected to weigh on the single currency in the run up to the meeting, an announcement of further monetary easing should not necessarily hurt the euro, as a potential ECB commitment to purchase higher risk – higher retur</p>