ECB Meeting Accounts: Incoming data point to resumption of growth in Q2

The near-term economic outlook remains clouded by uncertainty about the resurgence of the pandemic and the roll-out of vaccination campaigns, the European Central Bank's April Monetary Policy Meeting Accounts showed on Friday.

Additional takeaways

"Looking ahead, progress with vaccination campaigns and the envisaged gradual relaxation of containment measures underpinned the expectation of a firm rebound in economic activity in the course of 2021."

"Ample monetary policy support remained crucial beyond the pandemic period in order to support inflation and return it to the inflation aim."

"There was broad agreement among members that euro area financing conditions had remained broadly stable since the last monetary policy meeting in March."

"Members expressed broad agreement with the proposal made by Mr Lane to leave the ECB’s monetary policy configuration unchanged and to reconfirm the very accommodative stance."

"Incoming information pointed to a resumption of growth in the second quarter."

"It was also widely agreed that it should be highlighted that the future pace of purchases under the PEPP was data-dependent and would continue to be based on the joint assessment of financing conditions and the inflation outlook."

"New wave of the pandemic, including the spread of virus mutations and a slower vaccine roll-out represented downside risks for the growth outlook over the coming quarters."

"Commitment to preserving favourable financing conditions for all sectors of the economy over the pandemic period remained essential to reduce uncertainty and bolster confidence."

"Monetary policy meeting in June would provide the next opportunity to conduct a thorough assessment of financing conditions and the inflation outlook."

"Flexibility in the conduct of purchases was a cornerstone of the PEPP’s purchase strategy."

"Decision in March to undertake significantly higher PEPP purchases than during the first few months of the year remained appropriate."

"Monetary policy had to remain on a steady course, helping to reduce uncertainty and bolster confidence, thereby underpinning economic activity."

"Risk-free rates and sovereign bond yields had moved sideways and appeared to have decoupled from the repricing in US interest rates."

"Some caution was voiced, given that risks to wider financing conditions remained."

Market reaction

The EUR/USD pair showed no immediate reaction to these comments and was last seen gaining 0.27% on the day at 1.2110.