ING’s EZ economists believe that of the three tapering possibilities available to the ECB: (1) Fed style gradual tapering; (2) staircase changes (drop EUR 20bn each quarter) or (3) Lower for longer (drop to EUR 25bn or 20bn in Jan-18 but kept in place until end-2018) – the ECB would favour option 3. “While this may appear as somewhat aggressive relative to the market consensus, it would be coupled with some commitment to keeping interest rates low long after this was over. Getting the message across of a ‘dovish taper’ is going to be exceptionally difficult – and as we noted yesterday, we’re looking for a window of opportunity to go long EUR against the USD, JPY & CHF ahead of the 26 Oct ECB meeting.”