The ECB is likely to send a strong signal of its readiness to act as needed at next week’s monetary policy meeting, according to economists at Nordea.
Key quotes
“With just around 10% of the PEPP utilised at the end of week 16, it may be a bit early to ponder an expansion. However, we do see some risk of exactly that happening at next week’s meeting. If for nothing else, then to signal full readiness to act.”
“Rate cuts, taking interest rates deeper into negative territory, seems out of fashion these days and will probably not be high on the agenda. In any case, President Lagarde is likely to promise to do whatever it takes. If not now, then later.”
“We could see modest PEPP purchases in the weeks ahead despite a continued orderly widening of Italian spreads, while the ECB will act as a decisive backstop to prevent disorderly moves.”
Share
