According to analysts from Rabobank, today the European Central Bank “spilled the beans and outlined its policy framework for the coming year”, they see the decision clearly on the more dovish side.
“The ECB announced a taper that could probably not be any closer to market consensus. A large majority had expected a
“Despite the announcement that net asset purchases are expected to end this year, the overall statement was read as mostly dovish on balance. This was mainly due to the clarification of ‘well past’: this is intended to mean at least 6 months. Money market rates, and particularly those around the 12-18 month segment of the curve fell by several basis points.”
“We believe that the ECB opted to go for this combination of 15bn for 3 months because it wanted to avoid a too hawkish interpretation of this final step in the net asset purchases. In fact, during the Q&A Mr. Draghi noted that there had been
“Despite the big announcement today, the ECB still has a few surprises up its sleeve. Most importantly, the policy on the reinvestment of maturing bond holdings has not been specified further than the previously known “for an extended period of time after the end of the net asset purchases, and in any case for as long as necessary”. However, Mr. Draghi acknowledged that the ECB’s stock of purchased assets is an important part of the monetary policy going
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