The president of the European Central Bank (ECB), Mario Draghi, is expected to conjure his powers of allusion on Thursday with uncertainty over Brexit still looming large on the horizon.
"Resilient markets post-Brexit allow the ECB to only hint at new stimulus, which we expect in September," analysts at Bank of America Merrill Lynch said in a note Tuesday while referencing Monty Python's famous "nudge, nudge, wink, wink" sketch.
The Italian economist - well known for tough "whatever it takes" promises - will be up in front of the cameras following the ECB's rate decision Thursday where the bank is widely expected to hold off on any new announcements or rate cuts.
The Frankfurt-based institution is already pumping 80 billion euros ($88 billion) a month into the fragile euro zone economy and a lack of fresh data means it will likely hold off on any further moves following the U.K. referendum. Economists are expecting a hit to global growth due to Brexit and euro zone economies are expected to be particularly vulnerable. There's the added complication that the vote will also add weight to anti-EU sentiment across the region.
'Need to do more'
On Tuesday, one of the first useful data points released since the Brexit vote showed that German investor morale had fallen in July to the lowest level since November 2012. However, the ECB's quarterly lending survey on Tuesday stated that euro zone banks did not expect any credit shocks from Britain's decision to leave the European Union, and they estimated lending to continue to rise at a moderate pace in the third quarter of this year.
This will surely buoy Draghi who still faces criticism that his still of easing is actually trickling down to the real economy. Jennifer McKeown, a senior European economist at Capital Economics said Tuesday that the ECB needed to "do more to boost growth and inflation very soon."
Draghi will no doubt have to dodge questions on Italy and its troubled banking sector. Other hot topics on Thursday will include the uptake and bond purchases of the ECB's June TLTRO (targeted long-term refinancing operation).
But for all the hints that Draghi might give on Thursday, market participants really have their sights set on September - which will coincide with the bank revising its inflation forecasts.
September is 'live'
"We have no doubt continuing QE beyond March 2017 is necessary," Bank of America Merrill Lynch said in the note.
"Upping the language from 'close monitoring' to 'vigilance' ... would be an easy way to 'pre-sell' September, but we will not be surprised if Draghi chooses to be more blunt and simply states that 'a revision of the stance is imminent',"
Barclays' baseline scenario continues to envisage the announcement of a time extension of QE (quantitative easing) at the ECB's September meeting. Analysts at Citi have stated that the September 7-8 ECB meeting is likely to be "live."
"We expect a majority of ECB Governing Council members to conclude (in September) that the persistent undershooting of the inflation target requires a formal extension of the QE program beyond the soft-end date of March 2017, as well as a small 10 basis point cut in the main refinancing rate to -0.1 percent," the team of analysts at Citi, led by Guillaume Menuet, said in a note last week.
The ECB rate decision is due at 12:45 p.m. London time on Thursday with a press conference following at 1:30 p.m. London time.