Here comes a big day.

European Central Bank officials appeared to have fired the starting gun on a gradual exit from its ultra-loose monetary policy Wednesday, with its chief economist suggest next week's meeting in Frankfurt may provide a key signal as to when and how the bank will start moving towards normalized interest rates.

Peter Praet, a member of the ECB's Executive Board that votes on each interest rate decision, told an audience in Berlin that he was growing increasingly comfortable with the path of inflation in the currency area and the strength of the region's economic growth, particularly in jobs and wages, that would take consumer prices closer to the bank's 'just below 2%' target. His comments were echoed by Jens Weidmann, president of German's powerful Bundesbank and one of the favorites to replaced current ECB president Mario Draghi when his seven year term expires next year. 

"Next week, the Governing Council will have to assess whether progress so far has been sufficient to warrant a gradual unwinding of our net purchases," Praet said, referencing the bank's €2.55 trillion quantitative easing program. "In making its assessment, it will consider the underlying strength of the euro area economy and the pass-through to wage and price formations."

The euro traded at a 10-day high of 1.1767 following Praet's remarks, while benchmark 10-year German bund yields rose 7 basis points -- the biggest single-day advance in a year -- to trade at 0.44% as Weidmann noted that it was "plausible" to expect the bank's QE program, which is currently scooping up €30 billion a month in government, corporate and agency bonds each month, could come to and end this year.

"For some time now, financial market participants have been expecting that the asset purchases will end before 2018 is out," Weidmann said. "As things stand, I find these market expectations plausible."

The ECB will meet next week in Riga, Latvia -- it holds one meeting outside of its Frankfurt headquarters each year -- amid increasing speculation that it will signal an end to its quantitative easing program, which is set for a "soft" conclusion at the end of September. Draghi, however, has always stressed that the program could be extended, and that even if it isn't, coupon and maturing bond reinvestments would continue to add stimulus to the overall economy.

"An ample degree of monetary stimulus remains necessary for underlying inflation pressures to continue to build up and support headline inflation developments over the medium term," Draghi told reporters at the bank's last meeting in April. "This continued monetary support is provided by the net asset purchases, by the sizeable stock of acquired assets and the forthcoming reinvestments, and by our forward guidance on interest rates." 

However, Eurozone inflation accelerated to the fastest pace in more than a year last month, according to official Eurostat data, as a weaker euro and rising oil prices added to consumer price pressures around the region, suggesting the bank might feel more comfortable with removing some of the reinvestment impact.

Consumer prices around the single currency area accelerated 1.9% in May, according to the initial estimate from Eurostat, the region's official statistics office, topping Street expectations of 1.6%. So-called core inflation, which strips out volatile prices for food, energy, alcohol and tobacco products, rose an estimated 1.1, Eurostat said, also the fastest in more than a year.