Goldman: ECB Likely Act in Coming Months. Low Odds of QE

        17:35 EDT - Goldman Sachs doesn't expect ECB to roll out new stimulus tomorrow but adds that any surprise action could fuel rally in euro zone's sovereign bond markets and send already falling yields from Spain to Italy even lower. For now, Goldman believes the ECB will continue to adopt a dovish language bias reiterating that additional measures to boost growth are a possibility in the coming months, such as negative deposit rate. The possibility for ECB to buy government bonds, or QE, is "very low and requires evidence of a more acute deflationary risk." Goldman says the prospect of more easing from ECB would shrink the yield spreads of periphery nations vs German bunds further. Goldman is shorting bunds, deeming the market expensive. (min.zeng@wsj.com; @minzengwsj)
        (END) Dow Jones Newswires

        May 07, 2014 17:35 ET (21:35 GMT)