ECB Leaves Rates Unchanged

The European Central Bank will meet on Thursday in Naples, Italy, to announce its latest monetary policy. The meeting at 7:45 a.m. ET (12:45 p.m. BST) will be followed at 8:30 ET (1:30 p.m. BST) by a news conference with ECB president Mario Draghi.

Economists are not expecting any new rate cuts, with the central bank's three main policy rates practically at or below zero.

The ECB is going to lay out the details of the asset-backed securities and covered bonds it plans to buy. The purchasing plan "may include bundles of Greek and Cypriot bank loans with 'junk' ratings, a move that is likely to be unpopular with Germany," The Financial Times said.

The ECB is looking to bring back its balance sheet to around €3 trillion ($3.8 trillion), which would require an increase of around €1 trillion ($1.3 trillion) from where it currently stands. The size of the purchases announced today will provide a good indicator of whether the central bank can achieve that.

A Reuters poll of Eurozone money market traders suggested that €200 billion ($252.7 billion) in ABS and covered bond purchases are expected. Jefferies' Marchel Alexandrovich expects that a smaller announcement of €80-100 billion ($101-126 billion) purchases would be enough "to signal a serious commitment." Societe Generale analysts are expecting an announcement more in the range of €130-150 billion ($164-189 billion).

Draghi will likely field questions about quantitative easing, although Gennadiy Goldberg, a strategist at TD Securities, told the FT that the ECB is not expected to announce any major stimulus measures at Thursday's meeting.

The meeting is in Naples today, a part of Italy that has been hit particularly hard by the crisis. There are some sizeable protests, which you can follow on Twitter with the #BlockBCE hashtag.

Click here for live updates once the meeting starts »