Stefano Pozzebon/BI

Will Draghi be carrying a bazooka, or a peashooter?

At 12:45 p.m. GMT (7:45 a.m. ET) the European Central Bank will release its latest monetary policy decisions: There’s a press conference 45 minutes later and pretty much everyone is now expecting some sort of big stimulus package.

Analysts are expecting a quantitative easing (QE) scheme worth about €500 billion ($ 580.95 billion) to €600 billion. Anything smaller will be a negative surprise for markets are would likely spark a nasty reaction this afternoon.

Anything bigger is going to be a positive shock: Bloomberg reports that the ECB may announce a €50 billion per-month programme running until the end of 2016, which would be much bigger than most people expect.

Pretty much every leak and official comment from the ECB in the last couple of months has been leading up to this. ECB press chief Michael Steen notes that the ECB has 13 camera crews coming tomorrow, as opposed to the usual 2-3.

The eurozone officially dropped into deflation in December, with consumer prices falling 0.2%, the first negative figure since 2009. It’s likely to be driven further and further in the months ahead, with plunging oil prices driving the index. 

Whatever happens, this will be one of the most important ECB meetings since the worst days of the euro crisis in 2012.

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