ECB to cut deposit rate next week, even chance of quantitative easing boost: traders

[February 29, 2016]  (Reuters) - The European Central Bank will cut its deposit rate again next week, according to all 18 euro money market traders polled by Reuters, and they said there was an even chance it would also increase its monthly asset purchases.

Euro zone annual inflation fell back into negative territory in February, a first estimate showed on Monday, adding to the pressure the ECB faces to ease monetary policy further on March 10.

Still, traders gave only a median 50 percent probability of an increase at next week's meeting to the 60 billion euros the ECB is currently spending each month buying bonds.

Most traders said they expected a 10 basis point cut in the deposit rate to -0.4 percent.

The regular poll showed banks would borrow 61.0 billion euros ($66.4 billion) at the ECB's weekly tender, less than the 65.8 billion euros maturing.

($1 = 0.9184 euros)

(Reporting by Shrutee Sarkar; Polling by Vartika Sahu and Sarmista Sen; Editing by Hugh Lawson)

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