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TD Securities analyzes the approach of the European Central Bank to its quantitative easing plans in the next months.

Key quotes

“Net ECB APP purchases in January were €20bn (vs. €15bn in Dec). In terms of spilt, we saw an uptick in private sector purchases as compared to the previous two months.”

“The slowdown in private sector buybacks in Nov and Dec was driven by a lack of liquidity. However, the uptick in seasonal supply in Q1 provides the ECB with an opportunity to conduct purchases in both primary and secondary markets.”

“In the short-term, we think the private sector could see an edge due to QE buying in the coming weeks.”