ECB policymakers leaning towards temporary, limited APP boost – Reuters

Dhwani Mehta FXStreet

The European Central Bank (ECB) governing council members are converging on a debate over a limited and temporary increase of Asset Purchases Programme (APP) in the December meeting, Reuters reports, citing six sources with direct knowledge of the debate.

Additional takeaways

ECB could approve an envelope for APP or an increase limited in time with more frequent reviews.

App volume from April to be significantly lower than current app plus PEPP buys.

ECB to signal unusually high flexibility and optionality.

ECB hawks pushing for no APP rise appear ready to compromise, fearing that doing nothing risks market turbulence.

New ECB programme or open-ended app increase highly unlikely.

ECB commitment not to last beyond 2022 but some aim for signal that bond buys will last at least until end 2022.

Market reaction

EUR/USD is pressurizing lows near 1.1315, down 0.22% on the day.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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