Investing.com - The European Central Bank is likely to revise up inflation projections in June, but should keep its easing bias firmly in place, analysts at Morgan Stanley said on Wednesday.
Compared to March, the ECB looks likely to revise up their projections for inflation and also for growth, as considerably higher oil prices and the policy actions announced at the March meeting are factored into baseline forecasts, the U.S. bank said.
Despite the forecast upgrade, Morgan Stanley analysts don't expect any material changes in terms of current policy or the outlook for the future monetary policy stance.
The U.S. bank thinks the ECB will reiterate its easing bias by stressing downside risks to the growth outlook.
The ECB will likely emphasize its easing bias through its forward guidance by saying that the Governing Council continues "to expect [policy rates] to remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases".
Morgan Stanley said it would deem it to be premature to expect the ECB to contemplate additional easing in the near term, adding that policymakers might take until late 2016 or early 2017 to announce further monetary policy action.
Analysts also expect the ECB to announce the formal start of its corporate debt purchase program (CSPP) at the upcoming meeting.