Ten points on today's ECB meeting

1) There is a virtually universal consensus that an extension of QE will be announced, and the overwhelming expectation is that this will entail a 6 month extension at 80 bio per month, so a total increase of 480 billion.

2) Some adjustment to the current operational protocols will be required to implement such an increase.   A permanent change to the capital key seems unlikely, while opening the option of purchasing sub-depo rate yielding bonds is a possibility, and increasing the per-issue ownership limit provides the most bang for the buck (err....euro.)

3) How to introduce language suggesting the eventual end of the program?  Rather than promising 80 bio per month, the ECB could instead offer to buy "up to 80 bio, as required".  Alternatively, they could jettison the language keeping the door ajar for a further extension down the road.

4)  The 2019 inflation forecast is widely expected to be close to target.   In September's forecast round, 2018 was anticipated to be 1.5%; if this is held constant (or even raised), this would be a good indicator that the ECB thinks that QE may be getting long in the tooth.  Alternatively, it could also be seen as making future disappointments more likely.

5) As discussed yesterday, markets are no longer pricing further rate cuts in Europe.

6) It's interesting to note that CTAs' positions as of last week were considerably smaller than they were at the time of the December 2015 ECB disappointment.

7) It's also worth noting that the euro has seen a very considerable amount of buying in recent days from a wide range of accounts.   Last December, the euro was at a local low on the morning of the ECB announcement and speculative positioning and expectation were high.   This time around, positioning is much smaller and expectations almost certainly are, too.

8) Judging by the SPX at least, Trumpflation ecstasy remains unabated.

9) In sum, expectations and positioning both look quite a bit smaller than this time last year, so looking for another 2-3% squeeze is probably misguided.

10) While it is certainly conceivable that the ECB can surprise dovishly, it seems somewhat unlikely that they will.   A dovish surprise would likely entail more QE buying/no signal of a taper or end to the program/elimination of the capital key/hints of further rate cuts.  Macro Man would suggest that the relative likelihood of these outcomes is in the order listed.  This having been said, given the degree to which punters have vacated the short euro premises, a dovish outcome would likely generate a substantial push to the downside, as this is a trade that the street still embraces philosophically.