Analysts at Danske Bank, point out that yesterday, the ECB formally announced an end to the asset purchase programme by the end of the year.
“The decision was widely expected, but we find great interest in the fact that the ECB now ties the reinvestment period up to the first rate hike, and that the notion of the next step is a hike from the ECB, which would be a hawkish signal.”
“Draghi said that markets had understood the forward guidance on rates. That comment was somewhat surprising to us as markets currently only point to a 20bp hike in June 2020. Markets generally traded within a narrow band, and yesterday’s meeting does not alter our expectation of the ECB hiking rates in December 2019.”