A small victory for the European Central Bank Hawks (ECB). The official statement of the ECB was released shortly after 13:45 did not touch rates but revised (albeit moderately) the pace of the purchase program for the pandemic emergency (pandemic emergency purchase programme, Pepp). “Based on a joint assessment of financing conditions and inflation outlook, the Governing Council believes that favorable financing conditions can be maintained with a pace of net asset purchases under the Pandemic Emergency Purchase Program (pandemic emergency purchase program, PEPP) moderately lower than in the previous two quarters ”, the ECB points out in the statement.
The Governing Council also confirmed the other measures, namely the level of the reference interest rates of the ECB, the forward guidance on their probable future evolution, purchases under the asset purchase program (APP), reinvestment policies and longer-term refinancing operations. After the announcement of the central institute in Frankfurt European markets eliminated losses, with Piazza Affari moving into positive territory. In particular, the Ftse Mib index rose by 0.16% to 25,917 points. In today’s press release, the ECB reiterated that the Governing Council is ready to adjust all its tools, where appropriate, to ensure that inflation stabilizes at the 2% medium-term target. Now the ball passes to the president of the ECB, Christine Lagarde, who will illustrate the reasons for these decisions in the press conference that will start as usual at 2.30 pm.
“A small victory for the hawks,” analysts write ING commenting on the decision of the ECB which announced that the pace of Pepp purchases will be “moderately lower than in the previous two quarters”. “For us, it’s a small win for the hawks as it signals that tapering will eventually be on the table“, They add. “From 2.30 pm we will hear more from Christine Lagarde on the Bank’s latest macro projections, with our interest above all on inflation forecasts for next year, and maybe some suggestions on when and how the ECB will at least think about tapering. Small changes in language do not yet signal tapering, ”ING economists indicate.