The ECB is moving towards the end of its quantitative easing. What follows?

The European Central Bank is slowly moving towards completing its four-year program of quantitative easing. And that may be the easier side compared to what is ahead, according to market observers.
And while the members of the ECB feel comfortable about the end of the bond repurchase at the end of the year, it could be much more complicated in 2019.
It is then expected that the ECB would pull out of the bond markets for the first time as a source of liquidity. In addition, we may witness one or two interest rises, in an environment where Mario Draghi paves the way for his successor.

ABN Amro: ECB will start to reduce incentives in January

While the sources of the ECB signaled that the market has taken a sharp change in the rhetoric of central bank, ABN Amro analysts do not change their view of readiness in the near future the process of reducing the stimulus measures to begin.
Furthermore, ABN Amro adjusted its forecast and now the baseline scenario assumes the end of the program for purchases of assets.
Strategists believe that in January 2018 the ECB will start to decrease the monthly volume of purchases by 10 euro billion per month, resulting in quantitative easing program will be completed by June, then the ECB will start to normalize interest rates on deposits.
At ABN Amro believe that the first step in this direction will be held in September next year. ABN Amro still retains its forecast for EUR/USD, made in early March:
    Q2 2017 - 1.05
    Q3 2017 - 1.05
    Q4 2017 - 1.10
    1Q 2018 - 1.15
    2018 - 1.20

ABN Amro: Conclusions from the meeting of the ECB

ECB's press conference from the last week suggests that the European Central Bank is standing in the way of a phased exit from its flexible monetary policy, say experts from ABN Amro.
As believe in ABN Amro, as a first step in this direction, the Central Bank of Europe will make the meeting of the Board of Governors in June. The message for the markets will become more neutral and the possibility of reducing of interest rates in the future or further quantitative easing will drop, analysts say. Then, in September, the ECB will make an announcement on plans to reduce the program for the purchase of assets in 2018, they added. This will depend on the progress of inflation.
At ABN AMRO predict that the reduction in the monthly volume of purchases of assets will begin in April 2018. The pace of reduction would be equal to 10 billion per month. Thus in September 2018 the program for the purchase of assets will be completely phased out, analysts said.
They add that the first increase in interest rates on deposits by the ECB will be in March 2019.