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Marcus Ashworth is a Bloomberg Gadfly columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.

If risk is back on, there's now a big question looming in Frankfurt.

At the press conference after the European Central Bank President publishes its policy decision Thursday, President Mario Draghi will surely be asked whether officials discussed dropping their assessment that risks to the outlook lie to the downside. How he handles this question will be the most important factor by far to watch out for markets. Any signal it's being reconsidered would be the first baby step before any more substantive move to reverse negative rates or unwind quantitative easing could be on the table.

Draghi may well brush the question off, refusing to be drawn on any timetable, especially with the French presidential election final result not decided until May 7.  While Emmanuel Macron's victory in the first round of the elections has dialed the political temperature down, there are plenty of much bigger issues staying the ECB's hands. Expect Draghi to keep repeating them. Ad nauseam.

Not least of which is Italy, with its massive debt load and the parlous state of its banks. The tapering of the ECB's QE program from 80 billion euros ($87.1 billion) to 60 billion euros started this month -- that is not fortunate timing for the bonds of Italy or any of the peripheral countries. 

Bad Debt Mountain
Progress in resolving Italy's bad loan crisis has been glacial
Source: IMF

An added dilemma is that former Prime Minister Matteo Renzi is likely to win his governing party's leadership election this weekend, raising the prospect of early parliamentary elections ahead of the deadline early next year. With his Democratic Party (PD) behind in the polls to the populist opposition Five Star Movement, he's unlikely to pull the vote forward, but the heightened political risk creates another headwind for Italian bonds. 

Peripheral Penalty
Big spreads for non-core countries remain a major issue for the ECB to control
Source: Bloomberg

Equally, while there are warm noises burbling out of the Greek bailout talks, these are far from resolved and could still collapse. No need to take risks on that until its 6 billion euros in bond redemptions due in July have been safely made, courtesy of further European Union and International Monetary Fund loans.

While there are some promising signs on growth, it is inflation that the ECB solely targets. On April 6 Draghi stressed there were no grounds to “materially alter our assessment of the inflation outlook.” 

Inflation Stagnation
ECB's latest forecasts show inflation plateauing for the medium-term
Sources: ECB; Bloomberg Intelligence

The next real staging post is June, when central bank staff publish new economic forecasts. This is a natural time for the ECB to change its tune. Were Draghi to say today that officials will discuss the outlook bias then, this would be a massive signal that the arguments for tightening are gaining ground. But it's really unlikely. Right now, Il Maestro has plenty of reason keep the stimulus full steam ahead and swatting those pesky hawks away. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Marcus Ashworth in London at mashworth4@bloomberg.net

To contact the editor responsible for this story:
Jennifer Ryan at jryan13@bloomberg.net