The ECB left official rates unchanged at today’s council meeting and also confirmed the current QE schedule of EUR 30 bln per month that runs until the end of September. Going forward the ECB no longer says that QE can be extended in size and/or duration, but merely states that the current schedule can be extended “if necessary” and will run “in any case until the governing Council sees a sustained adjustment in the path of inflation consistent with the inflation aim”. Reinvestments will continue “for an extended period of time after the end of its net asset purchase program”. Rates will also “remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases”. As expected, a move further for the ECB towards an end of net asset purchases and Bund yields jumped to an intraday high of 0.6971% versus lows of 0.6501% early in the session and levels around 0.67% ahead of the statement.
Meanwhile, EURUSD rallied from 1.2380 to 1.2430 following the ECB announcement. The pairing is likely to steady now into the 13:30 Draghi presser.
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