The European Central Bank (ECB) kept interest rates and QE unchanged at the April meeting. According to analysts from Danske Bank, it was not a significant meeting and they saw it as a preparation for the June meeting.
Key Quotes:
“The ECB meeting concluded today was not a ‘significant’ meeting, with no new signals leaving many decisions for the June meeting. Near term growth outlook was ‘titled to the downside’ while the medium term growth risk was ‘broadly balanced’. The latter has paved the way for a lower PEPP volume to be agreed at the June meeting.”
“At the June meeting the PEPP purchases will be set according to ECB new staff (inflation) projections and the financing conditions. As data has come in in line with expectations since the March meeting we expect the PEPP volume to revert to around EUR60bn/month.”
“On the EUR/USD, this notion of the regional differences between the Fed and the ECB sent EUR/USD lower. Despite general global optimism, in an FX perspective it is not necessary to see ECB as a laggard to Fed.”
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