© Reuters. ECB meeting: why PGIM Fixed Income looks beyond rate decisions
The market will take into account the developments that may threaten risk assets in the euro area: further tightening of monetary policy and the weakening of the region’s economy
Spotlight on Thursday’s decisions Bce: The European Central Bank will reveal if and by how much it will raise eurozone interest rates further. Market expectations are for an increase of 25 basis points (+0.25%). “The market, however, will take due account of two developments that may threaten risky assets in the Eurozone: further tightening of monetary policy and the weakening of the region’s economy” said Guillermo Felices, Global Investment Strategist at PGIM Fixed income.
CONTINUING WITHDRAWAL OF LIQUIDITY FROM THE MARKET
In this regard, the expert points out that there is less attention than it deserves to the ECB’s continued withdrawal of liquidity from the market. His reference is, in particular, to Targeted Longer-Term Refinancing Operations, TLTRO), soon to expire, and the risks that the ECB anticipates plans to reduce the balance sheet (quantitative tightening)…
** This article was written by FinanciaLounge