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The German Constitutional Court did not reject the ECB’s bond purchases directly but gave the ECB 3 months to provide more clarifications, or the Bundesbank is out, per Nordea.

Key quotes

“The GCC ruled today that it was not ascertainable that the PSPP violates the constitutional identity of the Basic Law in general or the overall budgetary responsibility of the German Bundestag in particular.”

“The GCC gave the ECB three months to adopt a new decision that demonstrates in a comprehensible and substantiated manner that the monetary policy objectives pursued by the PSPP are not disproportionate to the economic and fiscal policy effects resulting from the programme.”

“Today’s ruling should increase uncertainty regarding the future to such an extent as to be negative for EUR assets in general. Italian bond spreads should see further widening pressure and the euro face pressure.”

“Today’s ruling also further illustrates the limits of the ECB’s interventions and adds pressure on the Euro-area governments to implement further measures on the fiscal side to tackle the corona crisis.”