From ZeroHedge:
As widely expected ahead of its decision this morning, the ECB kept its policy unchanged, but in a surprising new development (or perhaps not for a central bank best known to make broad, sweeping promises and never deliver), the ECB said that it expects "purchases under the PEPP over the next quarter to be conducted at a significantly higher pace than during the first months of this year."
In explaining its decision, the ECB Governing Council said it will "purchase flexibly according to market conditions and with a view to preventing a tightening of financing conditions that is inconsistent with countering the downward impact of the pandemic on the projected path of inflation." In addition, "the flexibility of purchases over time, across asset classes and among jurisdictions will continue to support the smooth transmission of monetary policy.
The ECB then rehashed its generic notice that "if favourable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon of the PEPP, the envelope need not be used in full. Equally, the envelope can be recalibrated if required to maintain favourable financing conditions to help counter the negative pandemic shock to the path of inflation."
Finally, in addition to disclosing no changes to the pace in QE and rates, the Governing Council vowed to continue to provide ample liquidity through its refinancing operations "noting that series of targeted longer-term refinancing operations (TLTRO III) remains an attractive source of funding for banks, supporting bank lending to firms and households."
In response, yields across European bond markets tumbled while Europe's Stoxx surged:
Here is the full press release:
The Governing Council took the following decisions:...
....MORE
