ECB: Key decision pushed out to December – Nomura
Research Team at Nomura, notes that at its recent Governing Council meeting, the ECB kept all policy rates unchanged, maintaining the pace of monthly PSPP purchases until at least March 2017 or beyond, if necessary.
Key Quotes
“Furthermore, the Governing Council discussed neither an extension nor programme exit strategies, including tapering, and provided no insight into the potential changes in the PSPP technical details.
Overall, the outcome of meeting was in line with expectations, pushing the decision on the PSPP re-design and duration to the December meeting, when the new December Eurosystem staff macroeconomic projections and the outcome of the Eurosystem committee’s work on the smooth implementation of the purchase programme will become available. The only unexpected information was that an abrupt end to the PSPP was “unlikely”.
As a result, we continue to favour as our main scenario that the ECB will extend duration of the PSPP by six months at its December meeting. This scenario, however, is increasingly conditional on our weaker growth outlook towards H2 2016 and the realisation of adverse shocks to the euro area economy.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
