he 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.
Regarding the PEPP implementation, there are still a number of outstanding questions. While Lagarde emphasised we should not focus on the weekly figure, but rather on the monthly figures, it remains unclear if the increase we have seen (when corrected for trading days) is the full amount of 'significantly'. We expect so and do not expect higher volume.
Rates traded in a tight range through the press conference. Initially a minor sell-off on the back of the 16 March comment of significantly higher volume which was reversed as Lagarde said that ECB and Fed are 'not on the same page'.
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. EUR/USD fell 30pips from today's highs to around 1.2030.
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.